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Stock Market News For Jul 13, 2018

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U.S. stock markets rebounded on Thursday buoyed by strong performance of technology sector with several tech behemoths closing at record levels. Yesterday’s broad-based market rally pushed all three major stock indexes to close in the green while Nasdaq finished at a record-high. Moreover, trade war fears evaporated for the time being as the news of a possible negotiation between the United States and China surfaced.   

The Dow Jones Industrial Average (DJI) closed at 24,924.89, increasing 0.9% or 224.44 points. The S&P 500 Index (INX) also advanced 0.9% to close at 2,798.29. The Nasdaq Composite Index (IXIC) closed at 7,823.92, gaining 1.4% or 107.31 points. A total of 5.8 billion shares were traded on Thursday, lower than the last 20-session average of 6.9 billion shares. Advancers outnumbered decliners on the NYSE by 1.75-to-1 ratio. On the Nasdaq, advancers had an edge over decliners by 1.44-to-1 ratio.  The CBOE VIX decreased 7.7% to close at 12.58.

How Did the Benchmarks Perform?

The Dow was up 0.9% which enabled the blue-chip index to reenter positive territory year to date after a gap of a single trading day. Notably, 25 of the 30-stock index closed in the green while 5 traded in the red.

The S&P 500 increased 0.9% led by 1.6% gain in both Technology Select Sector SPDR (XLK) and Communication Services Select Sector SPDR (XLC), 1.2% rise in Industrials Select Sector SPDR (XLI) and 1.1% increase in Heath Care Select Sector SPDR (XLV). Notably, ten out of 11 sectors of the benchmark index ended in positive territory.

Nasdaq Composite posted a big gain of 1.4% which enabled the tech-laden index to post first record-high level close since Jun 20.

Technology Stocks Lead Market Rally

On Jul 12, Wall Street witnessed strong showing of technology sector, primarily due to market expectations that this sector will be least affected by the second round of tariffs worth $200 billion which the Trump administration has decided to levy on Chinese imports. Consequently, Technology Select Sector SPDR (XLK) achieved its biggest one-day percentage gain since Jun 1.

Several tech giants like Facebook Inc. (FB - Free Report) , Amazon.com Inc. (AMZN - Free Report) , Microsoft Corp. (MSFT - Free Report) and Alphabet Inc. (GOOGL - Free Report) were up 2.2%, 2.4%, 2.2% and 2.5%, respectively. All four stocks hit their 52-day high level.  Apple Inc. (AAPL - Free Report) was also up 1.7%. Apple sports a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Trade War Fears Evaporate

Investors have shrugged off trade related concerns which gripped the market for last four and half months. The confidence of market participants further boosted following a Bloomberg news that communications between senior members of both the U.S. and Chinses government is on the card to find out amicable solutions. Notably, China is yet to retaliate against a massive $200 billion of tariffs that the Trump administration has decided to impose on its exports.

Economic Data

The Labor Department reported that initial claims for state unemployment benefits declined 18,000 to a seasonally adjusted 214,000 for the week ended July 7. This reading was lower than the consensus estimate of 227,000, reflecting tight job market condition of the United States. The reading for the first week of July was the lowest level since early May.

The Labor Department also reported that Consumer Price Index (CPI) increased 0.1% in June, lower than the consensus estimate of 0.2%. The June reading reflects an increase of 2.9% year-over-year, the biggest gain of CPI since February 2012. This clearly indicates that a steady-state inflationary trend is building in the U.S. economy.

Stocks That Made Headlines

Conoco Hikes Share Repurchase Program, Lowers Debt

ConocoPhillips (COP - Free Report) has received consent from board of directors for increasing share repurchase program for 2018 by 50% to $3 billion from $2 billion. (Read More)

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