Big Tech Surge Props Up Wall Street, Though Caution Reigns

Andrew Cummings
August 2, 2020

For the week, the S&P gained 1.73 percent, the Dow shed 0.16 percent and the NASDAQ climbed 3.69 percent.

Apple Inc surged as much as 7.1% to briefly take over Saudi Aramco as the world's most valuable public company, as it delivered year-on-year revenue gains across every category and in every geography.

For the week ending Friday, the Dow lost 0.2 per cent, while the S&P 500 and the Nasdaq gained 1.7 per cent and 3.7 per cent, respectively, Xinhua news agency reported on Saturday.

Tech companies continued to lead the advance in 2020, and their solid results are a validation for bulls who have bet the industry would emerge from the pandemic stronger than the rest of the market. The S&P 500 index and the Dow Jones index began to decline on Friday due to fears and economic repercussions associated with the coronavirus pandemic.

Expedia Group slumped 8.1% for the largest loss in the S&P 500 after it reported even weaker quarterly results than Wall Street expected. Chevron dropped 2.7% after it reported a worse loss for its latest quarter than Wall Street expected. The big companies in the S&P 500 are on track to report a almost 38% drop for the second quarter from a year earlier, according to FactSet.

The current $600 weekly federal unemployment benefit is expiring Friday, but lawmakers made little progress toward the next coronavirus relief deal.

The S&P 500 rose 0.8% following blowout profit reports from Apple and several other tech titans. They're three of the biggest companies in the world, making up almost 13% of the S&P 500 themselves, so their movements hold great sway over indexes.

All four stocks nevertheless are still up more than 10% so far in 2020, towering over the S&P 500's gain of less than 1%. The yield on the 10-year Treasury ticked up to 0.55% from 0.54% late Thursday. It touched its lowest level since March 9, the day it dropped to its record intraday low just below 0.34%. It tends to move with investors' expectations for the economy and inflation.

Declining issues outnumbered advancing ones on the NYSE by a 1.40-to-1 ratio; on Nasdaq, a 1.94-to-1 ratio favored decliners.

In point of fact, although all three key indices of Wall St. had flipped up and down throughout the session over growing worries about the economy alongside a garrulous debate in the Capitol Hill over a second leg of monstrous stimulus package, a 5.6 per cent rise in US Consumer Spending in June had marked up an initial phase of economic recovery, eventually lifting up the US stocks, nonetheless, a three-year low wage and benefits had kept a lid on gains.

Gold prices also shunted higher again as the safe-haven commodity was painfully close to reaching $2,000 per ounce for the first time, while the United States dollar hit a three-year low. Brent crude, the global standard, fell 81 cents to $42.94 a barrel.

"With the impact of past stimulus measures fading and given some evidence that the global recovery has already stalled, it remains to be seen what will help keep global stock markets elevated in the coming months, especially US stocks", said Fawad Razaqzada, a market analyst at ThinkMarkets.

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