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Stock Market News For Aug 1, 2018

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Markets rebounded on Tuesday on reports that the United States and China are willing to start talks in an effort to resolve trade disputes. This saw industrial stocks rallying. Also, strong economic data reflected a rise in consumer spending, which gave a boost to investors’ confidence. Both the Dow and S&P 500 posted their biggest monthly percentage gains since January.

The Dow Jones Industrial Average (DJI) gained 0.4%, to close at 25,414.78. The S&P 500 advanced 0.5% to close at 2,816.29. The Nasdaq Composite Index closed at 7, 671.79, jumping 0.6%. A total of 7.26 billion shares were traded on Tuesday, higher than the last 20-session average of 6.06 billion shares. Advancers outnumbered decliners on the NYSE by a 2.15-to-1 ratio. On Nasdaq, a 1.82-to-1 ratio favored advancing issues.

How did the Benchmark Perform?

The Dow added 107.95 points, with shares of Caterpillar (CAT - Free Report) and Pfizer (PFE - Free Report) gaining 2.9% and 3.5%, respectively. Shares of Boeing (BA - Free Report) gained 1.5%. Boeing has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The S&P 500 advanced 13.69 points. The Industrial Select Sector SPDR (XLI) gained 2.2%, while Health Care Select Sector SPDR (XLV) jumped 1.1%. Eight of the 11 major S&P 500 sectors ended in positive territory. The tech heavy Nasdaq gained 41.78 points.

U.S. and China Seek to Resolve Trade Disputes

Markets have been bleeding for the last few days particularly because of tech stocks, which have failed to impress this earnings season. Moreover, trade war fears have kept markets volatile for the last few months. However, trade war fears somewhat eased on Tuesday on reports of the United States and China seeking to initiate talks to resolve the ongoing trade dispute.

This gave a boost to investors’ confidence, which led to a rally in industrial stocks. Industrial stocks have been suffering since China imposed retaliatory tariffs on $34 billion on U.S. in early July. Apart from big exports like Boeing and Caterpillar, shares of Deere & Company (DE - Free Report) also jumped. Deere’s shares surged 4.8% on Tuesday.  

Impressive Economic Data

Investors’ confidence got a boost from the robust economic data released by the government on Tuesday. The Commerce Department said that consumer spending increased, which accounts for more than two-thirds of U.S. economic activity, increased 0.4% in June.

Moreover, the personal consumption expenditures (PCE) price index, excluding the volatile food and energy components, increased 0.1% in June.  The Commerce Department had last week said that the U.S. economy grew 4.1% in the second quarter, the strongest performance in four years. This reflects that the U.S. economy is on steady growth path.

Monthly Roundup

The last trading day of the month saw all three major indexes closing in the green. However, it was a volatile month for markets. On Jul 6, the Trump administration imposed tariffs on $34 billion worth of Chinese goods. China immediately retaliated with tariffs on equal amount of U.S. imports. This took a toll on markets with industrial stocks suffering.

Trade war fears continued to grip markets. However, as the earnings season kicked off, markets saw a rally, on expectations of robust earnings. The rally somewhat came to a halt in the later part of the month as major tech companies failed to post impressive results. 

Both the Dow and S&P 500 posted their biggest monthly percentage gains since January. The Dow gained 4.7% for the month, while the S&P 500 increased 3.6% in July. The Nasdaq also gained 2% in July, registering its fourth straight monthly gain.

Stocks That Made Headlines

C.H. Robinson Q2 Earnings & Revenues Top, Rise Y/Y

C.H. Robinson Worldwide, Inc.’s (CHRW - Free Report) second-quarter 2018 earnings beat the Zacks Consensus Estimate. (Read More)

Whiting Q2 Earnings In Line, Free Cash Flow Jumps

Whiting Petroleum (WLL - Free Report) reported second-quarter adjusted net income which came in line with the Zacks Consensus Estimate.(Read More)

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