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Stock Market News for Jul 23, 2021

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U.S. stocks closed higher on Thursday for the third consecutive session despite data showing an unexpected jump in jobless claims as investor shifted focus to corporate earnings reports. Although several S&P 500 sectors put up a poor show, the high-flying tech stocks led the rally. All the three major indexes ended in positive territory.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) gained 0.1% or 25.35 points to end at 34,823.35 points.

The S&P 500 rose 0.2% or 8.79 points to finish at 4,367.48 points. The rally was led by teach and health stocks, while energy and financial were the biggest losers.

The Technology Select Sector SPDR (XLK) and Health Care Select Sector SPDR (XLV) each gained 0.7%. The Energy Select Sector SPDR (XLE) and the Financials Select Sector SPDR (XLF) lost 1.1% each. Six of the 11 sectors of the benchmark index closed in positive territory.

The tech-heavy Nasdaq climbed 0.4% or 52.64 points to end at 14,684.60 points. Shares of, Inc. (AMZN - Free Report) and Apple, Inc. (AAPL - Free Report) gained 1.5% and 1% respectively. Apple carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

The fear-gauge CBOE Volatility Index (VIX) was down 1.23% to 17.69. A total of 8.25 billion shares were traded on Thursday, lower than the last 20-session average of 10.12 billion. Decliners outnumbered advancers on the NYSE by a 1.82-to-1 ratio. On Nasdaq, a 1.90-to-1 ratio favored declining issues.

Tech Stocks Drive Rally

On Thursday, investor sentiments remained high after Monday’s sharp selloff. Markets rebounded on Tuesday and since then stocks have been on a rally. Thursday’s bullish sentiments existed almost throughout the day despite data showing that applications for unemployment benefits increased last week.

However, earlier on Thursday, bonds went on a rally following the disappointing jobs data. This created some nervousness among investors who felt that the bond rally would undercut the rebound in equities but that was short lived as investors once again went back to their favorite tech stocks.

The tech rally was driven by optimism surrounding the sector’s growth ahead of some next week when some of the biggest names report their quarterly results.

Economic Data

The jobs data for last week was disappointing. The Labor Department said initial jobless claims jumped 51,000 to reach 419,000 in the seven days ended July 17, the highest in the past two months.

However, that didn’t dampen the spirits of investors much as most of the jobless claims were centered in Kentucky and Michigan. The high rate in these two states was mainly because of the annual retooling at the plants of automakers to build new models. Overall, 31 states reported decline in jobless benefit claims.

The Labor Department also reported that continuing claims declined by 29,000 to 3,236,000 for the week ending July 10. This is the lowest level since Mar 20, 2020. The 4-week moving average came in at 3,338,000, decreasing 44,000 from the previous week's revised average.

In other economic data, the Conference Board said that the country’s economy grew at a fast pace in June according to leading economic indicators and this momentum is likely to continue. The index increased 0.7% in June the Conference Board said.

The National Association of Realtors said on Thursday that existing home sales increased 1.4% in June to a seasonally adjusted annual rate of 5.86 million in June. This is the first time existing home sales have increased in the past four months. On a year-over-year basis, existing home sales rose 22.9%.

Also, the median sales price of an existing home jumped 23.4% year-over-year to hit a record high of $363,300.

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