Markets extended their gains on Wednesday led by a rally in tech stocks, as promising trade negotiations between the United States and Canada helped lift investors’ sentiment. Also, U.S. economy’s strength continued to bolster investors’ confidence, which helped markets. This saw the S&P 500 and Nasdaq closing at record highs for the fourth straight session. Also, the Dow finished at its highest since February.
The Dow Jones Industrial Average (DJI) gained 0.2%, to close at 26,124.57. The S&P 500 gained 0.6% to close at 2,814.04. The Nasdaq Composite Index closed at 8,109.69, increasing 1%. A total of 5.63 billion shares were traded on Wednesday, lower than the last 20-session average of 6.11 billion shares. Advancers outnumbered decliners on the NYSE by a 1.60-to-1 ratio. On Nasdaq, a 1.55-to-1 ratio favored advancing issues.
How did the Benchmark Perform?
The S&P 500 added 16.52 points, closing above 2,900 for the first time and also registering a record close. Tech stocks led the rally. The Technology Select Sector SPDR (XLK) and Consumer Discret Sel Sect SPDR (XLY) gained 0.9% and 1.1%, respectively. Eight of the 11 major S&P 500 sectors ended in positive territory. Shares of Amazon.com, Inc. (AMZN - Free Report) and Alphabet, Inc. (GOOGL - Free Report) gained 3.4% and 1.5%, respectively. Amazon has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Dow gained 60.55 points and is 1.9% away from its record close on Jan 26. The tech heavy Nasdaq added 79.65 points, to close at a record high. Shares of Apple (AAPL - Free Report) increased 1.5%.
Trade Tensions Ease
Easing trade tensions between the United States and other major economies of the world have been helping markets this week. The upbeat sentiment continued on Wednesday. Following Monday’s agreement between the United States and Mexico to overhaul the North American Free Trade Agreement (NAFTA), Canada’s foreign minister Chrystia Freeland met officials from the Trump administration in order to resolve trade disputes between the two countries.
Trade tensions have been rattling markets for a while. On Wednesday, investors continued to keep a close watch on the situation as possible negotiations between the United States and its trading partners progressed. Moreover, later on Wednesday President Donald Trump in a letter said that he was optimistic about Canada joining the U.S.-Mexico trade deal. This lifted investors’ sentiment as they shad of trade war fears, which resulted in a rally in stocks.
U.S. Economy Grows at Strong Pace
On Wednesday, the Commerce Department said that the U.S. economy grew at a stronger pace in the second quarter than earlier thought. An update to second-quarter economic growth came in at an annualized pace of 4.2%, which is slightly better than the earlier reading of 4.1%. This respresents the fastest pace of expansion in nearly four years.
Earlier on Tuesday, The Conference Board reported Tuesday that consumer-confidence index reached a near 18-year high. This shows the strength in the country’s economy. This gave a boost to investors’ confidence, leading to a rally in stocks.
However, in a data released by the National Association of Realtors, pending home sales declined 0.7% in July.
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