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Market Snapshot: Dow up 350 points, Nasdaq hits intraday record as tech and financial shares lead stock-market gains

Market Snapshot

Amazon stock tops $3,030 a share for first time ever, putting the company on pace to clinch a $1.5 trillion valuation

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U.S. stocks on Monday afternoon were trading higher to kick off the first full week in July, with shares of technology and financial companies adding to gains on Wall Street after Chinese equity benchmarks booked their highest close in two years.

Monday’s upbeat market action contrasts with a continuing spike in U.S. coronavirus cases and growing jitters about the reimposition of business restrictions to contain the viral outbreak.

How are benchmarks performing?

The Dow Jones Industrial Average

jumped 357 points, or 1.4%, at 26,184, while the S&P 500

climbed 37 points, or 1.2%, to 3,168. The Nasdaq Composite Index

rose 194 points, or 1.9%, to 10,401, after carving out a fresh intraday record of 10,462 earlier in the session.

The Dow finished last week’s holiday-shortened period up 3.3%, the S&P 500 put in a weekly gain of 4%, while the Nasdaq returned 4.6%, after closing at a record on Thursday.

The U.S. market was closed on Friday in observance of the Independence Day holiday.

What’s driving the market?

U.S. stocks were sharply higher Monday afternoon, led by shares of technology and financial companies after Wall Street followed Chinese equity markets higher.

Goldman Sachs Group Inc.

shares were nearly 5% higher Monday afternoon, leading the blue-chip Dow higher, along with Boeing Co.

and Walgreens Boots Alliance Inc.

But Monday’s gains also came amid growing investor doubts about the ability of the U.S. to contain the viral outbreak and its further economic fallout, after COVID-19 cases climbed across the U.S. over the Fourth of July weekend.

Coronavirus update: U.S. cases reach 2.9 million and death toll tops 130K, as 38 states see cases on the climb:

“This is potentially setting the U.S. on a very different activity restart path than most Western countries and much of Asia,” warned a BlackRock Investment Institute team led by Mike Pyle, global chief investment strategist, in a note Monday.

While the BlackRock team lauded the coordinated U.S. fiscal and monetary response in March, they also warned that the “resurgence of the virus is taking place just as Congress and the White House face a critical decision over whether to extend a number of crisis measures, including additional federal unemployment benefits set to expire at the end of July.”

Kristina Hooper, Invesco’s chief global market strategist, also warned that recent improvements on the U.S. jobless front and surprisingly better economic data could be derailed in the coming months if policy makers become complacent in their response to rising COVID-19 infections.

“In my view, more fiscal stimulus is clearly needed as so much of the stimulus already enacted is very temporary in nature,” Hooper wrote in a client note. “In addition, we are seeing a growing number of companies announce layoffs and file for bankruptcies while others are voluntarily re-closing stores.”

In U.S. economic data, the Institute for Supply Management reported its index of service sector companies jumped to 57.1 in June from 45.4 in May, marking the single-biggest increase since the survey was created in 1997. MarketWatch-polled economists expected to see a reading of 51. Any number above 50 represents an expansion in economic activity.

Yet, there were doubts the positive sentiment can be sustained.

“Thousands of retail shops and bars and restaurants are closing, or soon will be, after the coronavirus pandemic stopped the flow of traffic and crashed sales and revenues and tipped many businesses into financial bankruptcy and, yet, purchasing managers say the outlook for the service sector is looking up,” said Chris Rupkey, chief financial economist for MUFG.

Market bulls have been attributing rising stocks to optimism around a sharp, or V-shaped, economic recovery in the U.S., as well as Asia, in no small part due to global fiscal and monetary stimulus that helped markets recover from the depths of their mid-March selloff.

Beyond the rise in U.S. infections, optimism reflected in equities on Monday also comes despite economists at Goldman Sachs lowering their already downbeat forecast for U.S. domestic growth in 2020 to negative 4.6%, from a previous forecast for a 4.2% drop, pointing to the reimposition of COVID-19 restrictions on business activity. For 2021, the bank is sticking to its forecast for growth to rebound 5.8%.

In Asian hours Monday, Chinese shares jumped, with the flagship Shanghai Composite

finishing up 5.7%, to the highest level since 2018 and the CSI 300 Index

booking a similar return, after a front-page editorial in state-owned paper, China Securities Journal, said fostering a “healthy bull market” is important, according to a translation.

The move higher in stocks comes as China fends of sanctions and criticism about its decision to impose a national-security law in Hong Kong, a crackdown that has drawn the rebuke of several countries, including the U.S. and Canada.

Which stocks are in focus?
  • Buffett’s Berkshire Hathaway


    agreed to buy natural-gas transmission and storage assets from Dominion Energy

    for about $10 billion including debt, after the investor had refrained from buying assets during the public-health crisis so far. Berkshire Hathaway shares were trading up 2.3%.

  • Shares of Tesla Inc.

    rose nearly 10% Monday after a J.P. Morgan analyst raised his stock-price forecast for the electric vehicle maker, thought it remained well below the company’s current value.

  • Shares of Regeneron Pharmaceuticals Inc.

    gained 0.6% after the drugmaker said it had begun a Phase 3 clinical trial testing an antibody cocktail to prevent COVID-19.

  • Uber Technologies Inc.

    to purchase food-delivery service Postmates for around $2.65 billion, according to media reports. The ride-hailing company’s shares gained 5.5%.

  • Shares of Sina Corp.

    shot up 9.8% after the China-based online media company disclosed that it received a buyout bid from New Wave MMXV Ltd., in a deal that would value Sina at about $2.68 billion.

  •, Inc.’s stock

    rose 4.9% to trade at $3,011 a share, topping the $3,000 level for the first time in its history.

  • Unum Therapeutics Inc.

    surged 392% to $2.19 per share, leading the Nasdaq’s gains Monday, after it announced the completion of its acquisition of Kiq LLC, a privately held biotech company, and a near $104.4 million equity raise through the sale of convertible stocks.

How did other assets perform?

West Texas Intermediate U.S. crude

for August delivery fell only 2 cents, or 0.05%, to settle at $40.63 a barrel, on the New York Mercantile Exchange. In precious metals, August gold futures

rose $3.50, or 0.2%, to close at $1,793.50 an ounce.

The 10-year Treasury note yield

was up 1 basis points at 0.68%. Bond prices move inversely to yields.

The greenback fell 0.5% against a basket of its major rivals, based on trading in the ICE U.S. Dollar Index.

In European equities, the Stoxx Europe 600 index

closed up 1.6%, and London’s FTSE 100

climbed 2.1%.

Mark DeCambre contributed reporting

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