The stock market finished higher for the third day in a row thanks to a late-day rally on Wall Street, as the promise of a stimulus deal boosted stocks across the board. The Dow was up 185, or 0.7%, to 27,387, the Nasdaq gained 110, or 1.0%, to 11,108, while the S&P 500 rose by 21, or 0.6%, to 3,349. Advancing issues outnumbered decliners by a 6-to-5 ratio on the NYSE, where volume was quite light.
Traders said that the Nasdaq closed above the 11,000 for the first time today, cementing its place as the strongest global benchmark. As one trader explained, “While most of the main overseas indices are still well below their all-time highs, the Nasdaq keeps on hitting new records. While European and Asian stocks finished lower today, the tech benchmark hit yet another historic milestone.”
The tech sector staged an impressive afternoon rally, with Facebook (FB) and Apple (AAPL) spearheading the move. Both stocks hit new all-time highs, and Apple got one step closer to surpassing the once-illusive $2 trillion market cap. That would make the giant from Cupertino the most valuable public company globally, surpassing Saudi Arabia’s oil behemoth Aramco. That said, Apple is now trading near the most bullish price targets on the Street, and the euphoric sentiment in the tech sector could mean that a correction is ahead.
Despite the pessimistic forecasts earlier this week, the agreement on the next stimulus bill is now in sight, according to both parties. We still don’t know what the compromise concerning the federal unemployment benefits might look like, but a quick deal would be bullish for risk assets nevertheless. Democrats want the extension of the $600 per week benefits, while Republicans proposed a $200 per week replacement. The final agreement will likely be somewhere in between, with some kind of “back-to-work” bonus thrown into the mix.
Uber (UBER, +4.6%) reported mixed earnings after the bell, as the company’s legacy ride-hailing business suffered a steep drop in demand, but the Eats segment registered a massive surge in revenue. The company still reported a larger-than-expected loss for the quarter, and that could weigh on the stock and the tech sector tomorrow. Another former tech “unicorn” Dropbox (DBX, +0.2%) beat expectations on both its’s top and bottom line thanks to the surging demand for cloud-based services, but the company’s guidance disappointed investors as the mega-cap competitors of Dropbox are taking the market by storm.
All eyes will be on the government jobs report tomorrow, and even though today’s jobless claims report provided a bullish surprise, the weak ADP payrolls number and last month’s bearish trends made analysts suspicious of tomorrow’s numbers. Non-farm payrolls are forecast to increase by 1.55 million, with the unemployment rate dropping to 10.5% despite the stricter lockdown measures implemented in July. Hourly earnings are expected to fall by 0.5%. The consumer credit report will also be out tomorrow, while the overnight session will be highlighted by German and French industrial production.
As always, have a great evening and stay tuned!!!