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Stock Market News for Jul 12, 2021

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U.S. stock markets closed higher on Friday as reopening stocks and financials made a comeback, leading the benchmark indexes to fresh closing highs. The confidence of market participants was also boosted by the rising treasury yields that allayed concerns about economic slowdown. All the three major stock indexes closed the day in green.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) rose 1.3% or 448.23 points, closing at 34,870.16, a fresh closing high, snapping its losses from Thursday. Notably, 28 components of the 30-stock index ended in green while 2 finished the day in red.

The tech-heavy Nasdaq Composite closed the day at 14,701.92, up nearly 1% or 142.13, a record high, reversing its losses from the previous session, on the back of strong performance by large-cap technology stocks. The S&P 500 rose 1.1%, closing the day at 4,369.55, a new record high and terminating losses from Thursday’s session. The Financials Select Sector SPDR (XLF) and the Energy Select Sector SPDR (XLE) gained 2.9% and 2.1%, respectively. All eleven sectors of the benchmark index closed in the positive zone.

The fear-gauge CBOE Volatility Index (VIX) was down 14.8% to 16.18. A total of 8.51 billion shares were traded on Friday, lower than the last 20-session average of 10.5 billion. Advancers outnumbered decliners on the NYSE by a 3.77-to-1 ratio. On Nasdaq, a 3.33-to-1 ratio favored advancing issues.

Reopening Stocks and Financials Made a Comeback

Reopening stocks, that is, stocks sensitive to the functioning of the economy as well as financials made a comeback in Friday’s session, following concerns about the global economic recovery amid resurgence in COVID-19 cases across the globe owing to the delta variant, which had worried market participants and led the benchmark indexes lower on Thursday.

Shares of travel-related companies or reopening stocks rose in Friday’s session, including Royal Caribbean Group (RCL - Free Report) and American Airlines Group Inc. (AAL - Free Report) that rose 3.6% and 2.7%, respectively. Bank stocks like Bank of America Corporation (BAC - Free Report) and JPMorgan Chase & Co. (JPM - Free Report) also rose 3.3% and 3.2%, respectively. All four companies carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Rising Treasury Yields Eased Economic Slowdown Concerns

The confidence of market participants was also boosted by the rising 10-year Treasury yields which had hit a five-month low on Thursday and moved below 1.25%. On Friday, the 10-year Treasury yields climbed 6.7 basis points and settled at 1.354%, thereby easing concerns among market participants about the economic slowdown.

Economic Data

The U.S. Census Bureau reported that total inventories of merchant wholesalers, except for the manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading day differences but not for price changes, was up 1.3% to $709.8 billion in May, surpassing the consensus estimate of a rise of 1.1%, and following April’s increase of 1.1%, which was revised upward from 0.8% reported earlier.

Weekly Roundup

U.S. stock markets saw major indexes rising in Friday’s session to book their third successive week of gains. The Dow rose 0.2% during the week while the Nasdaq Composite and S&P 500 rose 0.4%, respectively. The gain in Friday’s session came after the decline in the previous session when concerns about the global economic recovery worried market participants. The markets had risen in Wednesday’s session after minutes from the U.S. Federal Reserve’s FOMC policy meet showed that the Fed is still looking to pursue the accommodative stance of monetary policy despite higher inflation.