Stock Market News for Jul 1, 2020 – July 1, 2020

Benchmarks closed higher on Tuesday and booked its biggest quarterly percentage gain in nearly 20 years. Investors cheered positive economic data and overlooked rising new coronavirus cases in multiple U.S. states.

The Dow Jones Industrial Average (DJI) rose 217.08 points, or 0.9%, to close at 25,812.88 and the S&P 500 gained 47.05 points, or 1.5% to close at of 3,100.29. The Nasdaq Composite Index closed at 10,058.77, gaining 184.61 points, or 1.9%. The fear-gauge CBOE Volatility Index (VIX) decreased 4.3%, to close at 30.43. Advancing issues outnumbered declining ones for 2.02-to-1 ratio on the NYSE and a 2.09-to-1 ratio on the Nasdaq favored advancers.

How Did the Benchmarks Perform?

Tech-stocks rallied on Jun 30, as shares of Facebook, Inc. (FB Free Report) and Amazon.com, Inc. (AMZN Free Report) both rose 2.9%, while Netflix, Inc. (NFLX Free Report) closed 1.7% higher.

All of the 11 major S&P 500 sectors closed higher on Tuesday, and the energy sector emerged as the biggest gainer jumping 2.2%.

The components of the Dow mostly ended in the green. However gains were capped by The Boeing Company’s (BA Free Report) loss of 5.8%. After the Norwegian Air cancelled order for 97 aircraft and said it would claim compensation.

Boeing carries aZacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Overall, the S&P 500 posted 13 new 52-week highs and 1 new low, while the Nasdaq Composite recorded 76 new highs and 16 new lows.

Stocks Rally Despite Powell & Mnuchin Remarks

On Tuesday, the Federal Reserve and US Treasury held a joint hearing to address their response to the coronavirus pandemic before the House Financial Services Committee. Fed’s Chairman Jerome Powell said that uncertainty reigns over the outlook for the economy in the wake of the coronavirus pandemic.

Powell also pointed that the output and employment remain far below the pre-pandemic levels. The economy’s path also depends on success of containing the coronavirus. Meanwhile, Treasury Secretary Steven Mnuchin told Congress the economy is in a strong position to recover from the coronavirus.

On the other hand, Anthony Fauci, the U.S. government’s top infectious diseases expert said there was no guarantee the United States will have an effective COVID-19 vaccine anytime sooner. He also warned that the virus spread could worsen.

Consumer Confidence Surge in May

On Tuesday, the Conference Board reported that consumer confidence jumped to 3-month high in June. The index rose to 98.1 for the month, well above the May’s revised figure of 85.9 and also surpassed the consensus estimate of 90.8.

The rebound in consumer confidence suggests that consumers believe the coronavirus will be less of a problem by the end of 2020.

Monthly Roundup

Benchmarks posted their third consecutive monthly gain in June. The Dow, the S&P 500 and the Nasdaq gained 1.7%, 1.8% and 6%, respectively, for the month.

At the beginning of the month stocks rallies as stimulus package and reopening process boosted investors’ sentiments. However, the rally had slowed lately due to resurgence in new coronavirus cases in several US states that raised prospects for new rounds of lockdowns.

Quarterly Roundup

All the three major indexes booked their best quarterly performance in more than 20 years. The indexes recovered from the lows seen in late March, when the coronavirus pandemic halted business activities for weeks. Benchmarks rallied boosted by hopes of economic reopening and stimulus packages.

The Dow finished the second quarter gaining 17.8%, its biggest quarterly rally since the first quarter of 1987. The S&P 500 soared nearly 20% in the second quarter, its biggest single-quarter gain since the fourth quarter of 1998. The tech-laden Nasdaq gained 30.6% for the quarter, its best quarterly surge since 1999.

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