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Stock Market News for Aug 17, 2021

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U.S. stocks closed mostly higher on Monday ahead of the major retail earnings reports this week, with the S&P 500 hitting a new record high. The Dow and the S&P 500 ended in positive territory, while the Nasdaq closed lower.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) gained 0.3% or 110.02 points to end at 35,625.40 and to close at a new record high. The blue-chip index also recorded its best daily percentage comeback.

The S&P 500 advanced 0.3% or 11.71 points to close at a record high of 4,479.71 points, after pairing earlier losses due to the weaker-than-forecast economic data on China. The index also registered its biggest daily percentage comeback since Mar 25.

The rally was driven by retail stocks. Consumer staples and healthcare sectors were the best performers. The Consumer Staples Select Sector SPDR (XLP) gained 0.6%, while the Health Care Select Sector SPDR (XLV) advanced 1.1%. Seven of the 11 sectors of the benchmark index closed in positive territory.

Shares of The Home Depot, Inc. (HD - Free Report) gained 1.3%, while Walmart, Inc. (WMT - Free Report) jumped 0.8%. Walmart carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

The tech-heavy Nasdaq declined around 0.2% or 29.13 points to end at 14,793.76 points.

The fear-gauge CBOE Volatility Index (VIX) was up 4.34% to 16.12. Decliners outnumbered advancers on the NYSE by a 1.86-to-1 ratio. On Nasdaq, a 2.22-to-1 ratio favored declining issues.

Markets Bounce Back after Initial Lows

The Dow and the S&P 500 have been closing at record highs for the past few session but markets opened lower on Monday amid fears of slowing global economic growth following lower-than-forecast economic data from China and growing tensions in Afghanistan.

Also, concerns over growing cases of COVID-19 also somewhat dented investors’ sentiment.

Data showed that China’s economic growth slowed more than expected. China’s retail sales increased 8.5% in July on a year-over-year basis, lower than analysts’ expectations of 11.5%. This saw both the oil prices and the 10-year Treasury yield falling in the afternoon. The 10-year Treasury yield fell to 1.26% on Monday afternoon.

However, investors still felt confident about the economy’s strength ahead of the retail earnings reports this week. Also, the big tech rallied in the afternoon session. Shares of Amazon.com, Inc. (AMZN - Free Report) and Facebook, Inc. closed 0.2% and 0.9% higher. This saw the Dow and S&P 500 closing at a new record high for the fifth straight session.

Economic Data

The New York Fed’s Empire State business conditions index fell to 18.3 in August from 43 in July, erasing almost all of its record-setting gains. The report follows a sharp drop in University of Michigan’s measure of consumer sentiment, indicating that the growing cases of the delta variant of COVID-19 have been denting people’s confidence.


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