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Stock Market News for Jun 29, 2020

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Benchmarks tumbled on Friday after several U.S. states rolled back some reopening measures due to the spike in new coronavirus cases, raising investors’ concern regarding economic recovery.

The Dow Jones Industrial Average (DJI) fell 730.05 points, or 2.8%, to close at 25,015.55 and the S&P 500 slid 74.71 points, or 2.4% to close at of 3,009.05. The Nasdaq Composite Index closed at 9,757.22, losing 259.78 points, or 2.6%. The fear-gauge CBOE Volatility Index (VIX) increased 7.8%, to close at 34.73. Declining issues outnumbered advancing ones for 4.49-to-1 ratio on the NYSE and a 4.44-to-1 ratio on the Nasdaq favored decliners.

How Did the Benchmarks Perform?

On Friday, the broader index fell sharply weighed by a 4.5% and 4.3% drop in the communication and financial sector. All the 11 major sectors of the S&P 500 ended in the red for the day.

The blue chip index tumbled with only one stock closing in the green. Shares of Cisco Systems, Inc. (CSCO - Free Report) ended 2.4% higher for the day. Steep decline of 8.7% and 7.6% in shares of The Goldman Sachs Group, Inc. (GS - Free Report) and NIKE, Inc. (NKE - Free Report) weighed heavily on the Dow.

Shares of Facebook, Inc. (FB - Free Report)   slid after The Unilever Group (UL - Free Report) and Verizon Communications Inc. (VZ - Free Report) joined advertising boycott pointing that the social media giant has not doing enough to stop hate speech on its platforms. Shares of Facebook plunged 8.3% on Friday, weighing on the Nasdaq. The top performer of the tech-heavy index was eBay Inc. (EBAY - Free Report) whose shares closed 3% higher for the day.

eBay carries aZacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Overall, the S&P 500 posted five new 52-week highs and no new lows, while the Nasdaq Composite recorded 49 new highs and four new lows.

Spike in COVID-19 Cases Roll Back Reopening Measures

On Friday, U.S. states saw a single-day record rise of 47,341 new coronavirus cases with Florida, Texas, California and Arizona in the forefront. The states surpassed their highest single-day record of 40,212 cases the day before. The United States has recorded more than 2.6 million cases so far and the drastic increase in cases has halted reopening plans in North Carolina, Louisiana and Kansas.

States of Texas and Florida are the first to reverse some reopening measures. Governor of Texas has ordered bars and establishments that has more than 51% customer for alcoholic beverages to shut down operations. And restaurants have to limit on-premise dining to less than 50% indoor capacity.

In Florida, on premises consumption of alcohol at bars has been suspended after the state reported 8,942 new virus cases in one day on Jun 26, shattering its single-day record of 5,508 cases just two days ago. Officials are now taking stern measures on businesses that don't follow guidelines like wearing masks, social distancing and limiting occupancy.

In Arizona, the number of new cases jumped by 5.4% on Jun 26 which surpasses the seven-day average of 2.9%. Governors of New York, New Jersey and Connecticut are still continuing the reopening process, but are imposing 14 day quarantine for visitors from hard-hit states.

Shares of companies that would benefit from an economic reopening tumbled on Friday. Major airlines companies like United Airlines Holdings, Inc. (UAL - Free Report) and American Airlines Group Inc. (AAL - Free Report) closed more than 5% lower, while cruise liner Norwegian Cruise Line Holdings Ltd. NCLH dropped nearly 5%.

Bank Shares Take a Dip

On Friday investors also analyzed the Federal Reserve’s annual stress test of the major banks. The stress test report showed that some banks could get close to minimum capital levels given the current coronavirus pandemic scenario. This will lead banks to suspend share repurchase programs and cap dividend payments for the third quarter.

The news sent some bank shares lower on Jun 26. Shares of Bank of America Corporation (BAC - Free Report) slid 6.4%, and JPMorgan Chase & Co. (JPM - Free Report) and Wells Fargo & Company (WFC - Free Report) closed 5.5% and 7.4% lower, respectively.

Consumer Spending Notch Up in May

The Commerce Department reported on Friday that consumer spending increased 8.2% in May, surpassing the consensus estimate of 7.8%. In fact, per the records Americans’ spending on goods and services in May was the largest one-month gain recorded since the records beginning in 1959.

Weekly Roundup

For the week ending Jun 26, the Dow, the S&P 500 and the Nasdaq lost 3.3%, 2.9% and 1.9%, respectively. The losses led the benchmarks record a second weekly drop in three weeks.  During the week investors struggled with rising new coronavirus cases that daunted the economic reopening process and weighed on the stock market.

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