Stock market news from July 7, 2021 to July 7, 2021
Wall Street closed in a mixed manner on Tuesday following subdued economic data and a flip-flop in oil prices. Investors remained concerned that the US economy was at the peak of the recovery after the devastation caused by the coronavirus last year. The S&P 500 and Dow Jones retreated from their high levels, while the Nasdaq Composite set a new all-time high.
How did the benchmarks perform?
The Dow Jones Industrial Average (DJI) fell 0.6% or 208.98 points to close at 34,577.37. In particular, 22 components of the index 30 stocks finished in the red while 8 in the green.
The S&P 500 fell 0.2% to end at 4,343.54, ending seven straight winning days. Energy Select Sector SPDR (XLE), Financials Select Sector SPDR (XLF), Materials Select Sector SPDR (XLB) and Industrial Select Sector SPDR (XLI) fell 3.3%, 1.6%, 1.5% and 1%, respectively. Notably, seven of the benchmark index’s eleven sectors closed in the red while four in the green.
Meanwhile, the Nasdaq Composite closed at 14,663.64, up 0.2% on the strength of large-cap tech stocks. The instructor index recorded a new closing high after July 2. In intraday trading, the index registered a new all-time high of 14,687.
The CBOE Volatility Index (VIX) rose 9.1% to 16.44, its highest close in two weeks. A total of 10.12 billion shares were traded on Tuesday, below the last 20 sessions average of 10.8 billion. The declines outnumbered advances on the NYSE by a 1.86 to 1 ratio. On the Nasdaq, a 2.18 to 1 ratio favored lower issues.
Moderate economic data
The Institute of Supply Management (ISM) reported that the Service Purchasing Managers (PMI) index fell to 60.1% in June, from a record 64% in May. The consensus estimate was 63.3%. Likewise, the final IHS Markit services PMI reading for June fell to 64.6% from 70.4% in May. Notably, any reading above 50 signifies an expansion of the service sector and a reading above 60 signifies exponential expansion.
Demand remained very strong for the service sector, with all 16 service industries growing in June. The June reading indicates the thirteenth consecutive month of growth for the service sector.
However, supply side disruptions such as labor shortages and the problem of getting essential supplies on time and at a reasonable price have been major obstacles. In fact, the employment sub-index fell to 49.3% in June from 55.3% in May, marking its first contraction in 2021.
In addition, government bond prices jumped, supported by strong demand. As a result, the benchmark 10-year U.S. Treasury note yield fell 6.5 basis points to 1.369%, the largest one-day decline since June 4 and its lowest since June 24. February. the US economy is probably at the peak of the recovery and growth could slow down in the near future.
Falling yields are a boon for growth stocks like technology and a bane for financial stocks like banks. Apple Inc. shares (AAPL – Free report) and Alphabet Inc. (GOOGL – Free Report) gained 1.5% and 0.7% respectively, while shares of The Goldman Sachs Group Inc. (GS – Free report) and JPMorgan Chase & Co. (JPM – Free Report) fell 1.2% and 1.7%, respectively. Apple carries a Zacks Rank # 2 (Buy). You can see The full list of today’s Zacks # 1 Rank (Strong Buy) stocks here.
Crude Oil Price Flip Flop
The Organization of the Petroleum Exporting Countries and its allies failed to come to an agreement on production quotas for August and beyond and have postponed their meeting indefinitely. As a result, the price of US benchmark oil, West Texas Intermediate, hit $ 76.98, its highest level since November 2014. However, it closed at $ 73.37, down 2.38% or more. $ 1.79. As a result, the actions of global oil giants like Exxon Mobil Corp. (XOM – Free Report) and Chevron Corp. (CVX – Free Report) reached 2.9% and 2% respectively.
The stocks that made the headlines
Knight-Swift buys carrier LTL AAA Cooper for $ 1.35 billion
Knight-Swift Transportation Holdings (KNX – Free Report) acquired Dothan, AL-based carrier AAA Cooper Transportation for an enterprise value of $ 1.35 billion. (Read more)
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