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Stock Market News for Oct 30, 2020

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Wall Street closed higher on Thursday recovering some lost ground of previous day's rout. Better-than-expected economic and earnings data boosted market participant's confidence on risky asset like equities. All the three major stock indexes ended in green.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) gained 0.5% or 139.16 points to close at 26,659.11, reversing its fourth straight negative close. Notably, 12 components of the 30-stock index ended in the red while 18 finished in green. The index is 6.7% away to become green year to date. Moreover, the tech-laden Nasdaq Composite finished at 11,185.59, climbing 1.6% or 180.72 points due to strong performance by large-cap technology stocks.

Meanwhile, the S&P 500 surged 1.2% to end at 3,311.11, reversing its third straight negative close. The Energy Select Sector SPDR (XLE), the Consumer Discretionary Select Sector SPDR (XLY) and the Materials Select Sector SPDR (XLB) rallied 3.1%, 2.5% and 2.1%, respectively. Notably, ten out of eleven sectors of the benchmark index closed in positive zone and one in negative.

The fear-gauge CBOE Volatility Index (VIX) was up 6.8% to 37.59. A total of 9.74 billion shares were traded on Thursday, higher than the last 20-session average of 9 billion. Advancers outnumbered decliners on the NYSE by a 1.88-to-1 ratio. On Nasdaq, a 1.89-to-1 ratio favored advancing issues.

Q3 U.S. GDP Jumps Record High Level

The U.S. economy has performed exceptionally well in the third-quarter 2020 surpassing market's expectations. On Oct 29, the Department of Commerce reported that the GDP jumped a record high 33.1% at annualized pace after plunging 31.4% in the second quarter. The figure was also higher than the Zacks Consensus Estimate of 31.3%.  

In the third quarter, personal consumption increased 40.7% annually after plummeting 33.2% in the second quarter. Quarter-over-quarter, the core personal consumption increased 3.5% in the third quarter after declining 0.8% in the second quarter.

Despite a record jump in the third-quarter GDP, the U.S. GDP came in at a seasonally adjusted annual rate of $18.58 trillion, lower than $19.24 trillion in the fourth quarter of 2019. Overall, economic activity is still $660 billion or 3.5% below the pre-pandemic level.

Weekly Jobless Claims Fall

The Department of Labor reported that initial jobless claims dropped 40,000 to 751,000 for the week ended Oct 24, better-than the consensus estimate of 786,000. Previous week's jobless claims were revised upward to 791,000 from 787,000. It was the lowest initial claims total since the week of Mar 14. For the nine consecutive weeks, initial claims stayed below 1 million.

The four-week moving average for initial claims decreased to 787,750 from 812,250. Continuing claims, which include those receiving unemployment benefits for at least two straight weeks, dropped by 709,000 to 7.75 million for the week ended Oct. 17.

Other Economic Data

The National Association of Realtors reported that the index for pending home sales dropped 2.2% in September after increasing 8.8% in August. Year-over-year, contract signing for pending home sales were up 20.5%.

Solid Earnings Results

The Kraft Heinz Co. (KHC - Free Report) reported robust third-quarter 2020 results, with the top and the bottom line surpassing the Zacks Consensus Estimate. Adjusted earnings per share of $0.70 surpassed the consensus mark of $0.63. The company posted revenues of $6.44 billion for the quarter, surpassing the Zacks Consensus Estimate by 1.03%. (Read More)

Comcast Corp. (CMCSA - Free Report) came out with quarterly earnings of $0.65 per share, beating the Zacks Consensus Estimate of $0.51 per share. The company posted revenues of $25.53 billion for the quarter, surpassing the Zacks Consensus Estimate by 3.24%. (Read More)

Alexion Pharmaceuticals Inc. came out with quarterly earnings of $3.24 per share, beating the Zacks Consensus Estimate of $2.59 per share. The company posted revenues of $1.59 billion for the quarter, surpassing the Zacks Consensus Estimate by 11.55%. (Read More)

Consequently, shares of The Kraft Heinz, Comcast and Alexion surged 2.8%, 2.6% and 2.9%, respectively. All the three stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stocks That Have Made Headline

Cabot Oil Q3 Earnings Top Estimates, Revenues Miss Mark

Cabot Oil & Gas Corp.’s third-quarter 2020 net income per share — adjusted for special items — of $0.09 beat the Zacks Consensus Estimate of $0.07. (Read More)

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