Stock indexes in the United States rose on Friday, putting markets on track to recover from a selloff prompted by a decrease in Treasury yields and concerns about the global economy’s recovery from the epidemic in the previous session. What are the major indices performing these days?
The Dow Jones Industrial Average DJIA, +1.20% increased 438 points, or 1.3 percent, to 34,861 points.
The S&
The Nasdaq Composite Index COMP, +0.96% rose 119 points, or 0.8 percent, to 14,680.
The Russell 2000 index RUT, +1.79 percent of small-capitalization companies was up 1.7 percent.
Stocks fell on Thursday, although they ended the day off their session lows. After plummeting more than 500 points at its session low, the Dow finished 259.86 points lower, or 0.7 percent, at 34,421.93. The S&P 500 ended the day 0.9 percent lower, while the Nasdaq Composite dropped 0.7 percent, a day after both indices set new highs.
Stats for the week The Dow and S&P 500 were on track to gain less than 0.1 percent this week. The Nasdaq Composite was expected to rise 0.2 percent this week, marking the first weekly fall in three weeks. All three benchmarks would be up for the third time in a row. Meanwhile, the Russell 2000 was set to drop 1.6 percent for the second week in a row. What is the market’s driving force? Bullishness returned to Wall Street on Friday afternoon. Following a drop in stocks on Thursday due to concerns about global growth prospects as some countries grappled with the coronavirus epidemic, the stock market was showing a strong return. Concerns about the epidemic were blamed, along with a slew of other factors, for a recent rise in US Treasury bonds that brought long-term yields to their lowest levels since February. However, yields began to rise again on Friday, with the 10-year U.S. Treasury yield TMUBMUSD10Y, 1.351 percent rising 5 basis points to 1.342 percent. On Thursday, the yield fell below 1.25 percent for the first time in five months. Some investors and experts believe that the stock market’s recent surge masks underlying issues. “I believe the market has been and remains perplexed. It can’t decide whether it wants bad economic news, which means more easy money but also potentially more inflation, or good economic news, which means Fed tapering sooner rather than later but also potentially flatter markets, tighter credit, and weaker earnings,” said Randy Frederick, vice president of trading and derivatives at the Schwab Center for Financial Research. He predicted, “This conflict will continue until earnings season picks up and provides a needed distraction.” Meanwhile, coronavirus-related restrictions in Asia and Europe have been tightened. A day after Japan declared a state of emergency that practically excludes spectators from the 2020 Olympics, Seoul’s pandemic alert was raised to its highest level, the Netherlands announced fresh steps, and social-distancing laws were strengthened in Sydney. While the spread of the delta variant of the coronavirus that causes COVID-19 was cited as one of the reasons for concerns about the global economic outlook, some analysts questioned whether the fight against the pandemic in some Asian and emerging market countries in particular would be enough to derail the global equity market rally. Read more: What caused the stock market to plummet? Bond yields are falling, indicating a ‘growth scare.’ In the end, according to Ipek Ozkardeskaya, senior analyst at Swissquote, lowering yields should be a good for equities. Falling rates suggest that inflation and the possibility of the Federal Reserve withdrawing its easy money policies more aggressively than expected are no longer a reason for concern, she added. “The market discourse is obviously transitioning from transitory inflation to transitory recovery, and that’s probably what keeps Treasury inflows elevated, paired with a typically low issuance of Treasurys in July and the Fed returning to the market after the July 4 holiday,” the analyst added. As a result, the most rational market reaction is decreasing Treasury yields and rising equities prices, albeit it’s worth noting that this time, rising COVID concerns are accompanied by rising COVID cases,” Ozkardeskaya stated. The start of the second-quarter U.S. corporate earnings reporting season next week, according to market bulls, might potentially support markets. According to FactSet analysts, the S&P 500 is predicted to enjoy a 63.6 percent growth in earnings in the second quarter compared to the previous year, which would be the greatest 12-month gain since the fourth quarter of 2009. In a single graph: As the second-quarter reports begin to roll in next week, get ready for a burst of profit increase. Meanwhile, the Biden administration was expected to issue a new executive order on Friday aimed at combating anticompetitive activities in the technology sector. According to the article, the order comprises 72 acts and recommendations spanning a dozen government agencies. In other news, the People’s Bank of China stated on Friday that it was lowering reserve requirements for its banks to help the world’s second-largest economy. The Reserve Requirement Ratio, or RRR, would be reduced by a half point to a weighted average of 8.9%, the PBOC announced on July 15. In economic news, wholesale inventories in the United States increased 1.3 percent in May, compared to 1.1 percent projected by economists on average, indicating that stocks are still tight due to supply-chain bottlenecks and increased demand in the aftermath of the pandemic. Which businesses are being scrutinized?
Philip Morris International Inc. PM, +1.07% announced intentions to buy Vectura Group PLC, a U.K. pharmaceuticals company specializing in inhaled medications, for $1.24 billion in cash, as part of its attempt to diversify its business beyond tobacco and nicotine. In premarket trading, Philip Morris stock jumped 1.7 percent.
Levi Strauss & Co. LEVI, +1.32 percent after the jeans manufacturer announced results that beat Wall Street expectations and boosted its full-year projection late Thursday. The company’s stock was up 3.5 percent.
According to a report from Reuters on Friday, Stripe has recruited Cleary Gottlieb Steen & Hamilton LLP to help it arrange for an initial public offering.
United Airlines Holdings Inc. (UAL) stock was in focus on Friday as the airline announced it was adding roughly 150 flights to warm-weather destinations in the United States, as well as expanding service to Mexico, the Caribbean, and Central America, as the recovery from the COVID-19 pandemic continues.
Altria Group Inc. MO said on Friday that it has agreed to sell its Ste. Michelle Wine Estates business for $1.2 billion to private equity company Sycamore Partners Management LP.
The FDA and the Centers for Disease Control and Prevention warned on Thursday that there is no scientific evidence that COVID-19 booster injections are necessary, just hours after pharmaceutical Pfizer PFE said it will seek approval for a Covid booster shot to help contain the Delta version.
Stamps.com Inc. is a company that sells stamps online.
STMP stated on Friday that it has reached an agreement to be acquired by software investment firm Thoma Bravo in a cash transaction valued at $6.6 billion. The stock was up more than 63 percent.
What about your other assets? How are they doing?
The ICE U.S. Dollar Index DXY, which compares the currency to six main competitors, was down 0.2 percent.
On Friday, oil futures jumped substantially higher, with the US benchmark CL00 up 1.5 percent to $74.03 a barrel. Gold GC00 was slightly higher at $1,803.40 an ounce, up $2.90, or 0.2 percent.
Following Thursday’s losses, European equities rebounded, with the Stoxx Europe 600 SXXP climbing 1.3 percent for a weekly gain of 0.2 percent and London’s FTSE 100 UKX finishing 1.3 percent higher for a weekly loss of 0.02 percent.
In Asia, the Shanghai Composite SHCOMP fell less than 0.1 percent on Friday but gained 0.2 percent on the week, Hong Kong’s Hang Seng Index HSI rose 0.7 percent on the day but lost 3.4 percent on the week, and Japan’s Nikkei 225 NIK fell 0.6 percent on Friday, contributing to a 2.9 percent weekly loss./n
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