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Stock Market News For Jul 6, 2018

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Markets closed higher on Thursday lead by a rally in tech stocks. Also, reports of the United States and European Union (EU) planning to withdraw auto tariffs reinstated investors’ confidence to some extent. However, investors continued to feel jittery as the United States prepared to slap tariffs on Chinese imports. All three major ended in the green.

The Dow Jones Industrial Average (DJI) rose 0.8%, to close at 24,356.74. The S&P 500 gained 0.9% to close at 2,736.61. The Nasdaq Composite Index closed at 7,586.43, increasing 1.2% led by a rally in tech stocks. A total of 5.76 billion shares were traded on Thursday, lower than the last 20-session average of 7.07 billion shares. Advancers outnumbered decliners on the NYSE by a 2.79-to-1 ratio. On Nasdaq, a 2.40-to-1 ratio favored advancing issues.

How did the Benchmark Perform?

The Dow gained 181.92 points. Intel Corporation (INTC - Free Report) was one of the best performers. Shares of Intel jumped 2.6%. Intel has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The S&P 500 added 23.39 points, with tech and communication services stocks gaining the most. The Technology Select Sector SPDR (XLK) and Communication Services Select Sector SPDR (XLC) gained 1.4% and 1.5%, respectively. Of the 11 major S&P 500 sectors, 10 ended in positive territory. The tech-heavy Nasdaq advanced 83.75 points, with shares of Facebook, Inc. , Alphabet, Inc. (GOOGL - Free Report) , Amazon.com, Inc. (AMZN - Free Report) and Netflix, Inc. (NFLX - Free Report) jumping 3%, 2.2%, 0.3% and 2%, respectively.

Tech Stocks Bounce Back

Tech stocks have been driving markets for quite some time. However, since February tech stocks have been showing volatility on fuelled by fears of a trade war. Tech companies that have substantial focus on China stand to lose the most in this case. However, a stellar show by tech companies once again helped markets on Thursday.

Shares of chipmaker Qorvo, Inc. (QRVO - Free Report) surged 5.7%, shedding trade war fears, as it cited robust demand for smarphones in China. Shares of Micron Technology Inc. (MU - Free Report) also jumped 2.6% after the company project only a slight hit from a temporary ban on some select sales in China.

Trade War Fears With EU Ease

On Thursday, investors’ confidence also got a boost on news that German chancellor Angela Markel said that she would back lowering EU tariffs on car imports from the United states. This would mean that Trump could possibly do away with slapping tariffs on cars imported from the EU. This reinstated investors’ confidence to some extent, with shares of U.S. automakers rallying. Shares of Fiat Chrysler Automobiles N.V. and Ford Motor Company (F - Free Report) jumped 6% and 0.6%, respectively. Shares of General Motors Company (GM - Free Report) increased 1.3%.

Trade War With China Begins

Markets have been volatile for a while on fears of a trade war. The fears escalated further keeping investors on the edge, as readied to impose tariffs on $34 billion worth of Chine imports on Friday. China, which had a day earlier said that it would not take the first step toward beginning a trade war, is expect to come up with its own set of levies on goods imported from the United States. This once again dented the confidence of investors.

Minutes of Fed’s Meeting Released

The Federal Reserve released minutes from its Open Market Committee’s June meeting. The minutes reflected that the country’s central bank was worried that allowing the economy to run too strong could result in significant economic slowdown. Also, the policy makers also foresee negative risks from U.S. trade policy, which they feel have intensified.

The Fed in its June meeting had raised interest rates for the second time in the year and had signaled that more interest rate hikes were likely. The minutes of the meeting were released after ADP released data that jobs grew 177,000 in June, missing expectations. Moreover, weekly jobless claims unexpectedly increased last week to 231,000. 

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