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Stock Market News For Jul 24, 2019

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Markets closed in record territory on Tuesday following renewed optimism on the U.S-China trade war front. Further, a deal between Trump and congressional leaders to extend the debt limit by two years. The three major benchmarks closed at record highs.

The Dow Jones Industrial Average increased 0.7%, to close at 27,349.19. The S&P 500 increased 0.7% to close at 3,005.47. The tech-laden Nasdaq Composite Index closed at 8,251.40, gaining 0.6%. The fear-gauge CBOE Volatility Index (VIX) decreased 4.6% to close at 12.91. Advancers outnumbered decliners on the NYSE by a 1.70-to-1 ratio. On Nasdaq, a 1.17-to-1 ratio favored advancing issues.

How Did the Benchmarks Perform?

The Dow added 177 points to close in the green. The Dow ended at its highest level since Jul 15. Further, this also marked its second highest close in history. Gains for the 30-stock index were broad-based.

Shares of Caterpillar Inc. CAT increased 2.1% and supported gains for the Dow. The stock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The S&P 500 rose 20 points to end in positive territory. Of the 11 major sectors of the S&P 500, 10 ended in the green, with materials stocks leading the advancers. The Materials Select Sector SPDR Fund (XLB) increased 2.1% on Tuesday. Meanwhile, the broader index closed at its third-highest level in history and just 0.3% shy from its highest ever close it hit on Jul 15.

Meanwhile, the Nasdaq advanced 47 points to also close in the green. Gains for the Nasdaq were supported by a 0.8% rally in the shares of Alphabet Inc. GOOGL.

U.S. Officials to Visit China for Trade Talks

Per a Bloomberg report on Jul 23, U.S. Trade Representative Robert Lighthizer and other senior officials from the country would be travelling to China on Jul 29. This would mark the first ever face-to-face discussion between the two countries since negotiations ended abruptly in May.

The report also states that there would be discussions on a variety of outstanding issues and a major breakthrough isn’t likely. Also, the Chinese had requested that the meeting take place in Shanghai instead of Beijing.

Trump and Congressional Leaders Strike a Deal on Debt Limit

President Trump reached a deal with congressional leaders on Jul 22 which allows for a two-year extension of the debt limit and removes federal spending caps. This deal would help prevent the first ever government default this year and as well as another government shutdown.

The terms of the deal specify that the Treasury Department’s borrowing limit would be extended till Jul 31, 2021. In the absence of such an arrangement, the department’s borrowing could shoot above its limit before Sep 9, 2019. This would likely trigger a default in terms of debt.

Further, the deal also provides for an increase in spending on discretionary programs to $1.37 trillion for the fiscal year 2020 and also allows for a marginal increase in 2021.

Approximately $738 billion would be earmarked for defense spending from the budget of $1.37 trillion. At the same time, non-defense spending would be capped at $632 billion in fiscal 2020.

Economic Data

On the economic data front, the existing home sales for June came in at 5.27 million units, below the consensus estimate of %.34 million units.

Stocks That Made Headlines

Interpublic Surpasses Q2 Earnings & Revenue Estimates

The Interpublic Group of Companies, Inc. IPG reported solid second-quarter 2019 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate. (Read More)

Canadian National Q2 Earnings Top, Revenues Miss Mark

Canadian National Railway Company’s CNI adjusted earnings which beat the Zacks Consensus Estimate of $1.26.  (Read More)

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

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