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Stock Market News for Jun 30, 2020

Zacks Equity Research
·5 min read

The Dow recorded its best single-day gain in nearly three weeks on Monday after shares of Boeing pushed the blue-chip index higher. Meanwhile, the S&P 500 and the Nasdaq moved up as investors hope for a stimulus-backed economic rebound that overshadowed spike in new coronavirus cases in the country’s hotspot.

The Dow Jones Industrial Average (DJI) rose 580.25 points, or 2.3%, to close at 25,595.80 and the S&P 500 gained 44.19 points, or 1.5% to close at of 3,053.24. The Nasdaq Composite Index closed at 9,874.15, gaining 116.93 points, or 1.2%. The fear-gauge CBOE Volatility Index (VIX) decreased 8.5%, to close at 31.78. Advancing issues outnumbered declining ones for 3.00-to-1 ratio on the NYSE and a 2.01-to-1 ratio on the Nasdaq favored advancers.

How Did the Benchmarks Perform?

Benchmarkshit their session highs on Monday just minutes ahead of the close as positive economic data cheered investors who overlooked rising infections. The rally helped the S&P 500 close in positive territory for the month with one trading session left.

All the 11 major sectors of the S&P 500 closed in the positive territory led by 3.2% and 2% gain in the as industrials and communication sectors.

The Dow’s surged as The Boeing Company BA jumped 14.4% on Monday after the U.S. Federal Aviation Administration begins Boeing 737 Max test flights.

The Nasdaq was boosted by significant gains in shares of American Airlines Group Inc. AAL and Expedia Group, Inc. EXPE, that closed 7.6% and 6.6%, higher respectively. Facebook, Inc. FB which is a major player of the tech-laden index also rose 2.1% on Monday. Shares of the company tumbled recently as major companies said they will pause advertising on its platforms due to Facebook’s ineffectiveness in stopping hate speeches and misinformation.

Facebook 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 one new 52-week highs and no new lows, while the Nasdaq Composite recorded 50 new highs and 16 new lows.

Investors Hope for Economic Stimulus as COVID-19 Cases Persist

On Monday, the United States recorded 44,734 new coronavirus cases, with California, Texas and Florida leading with more than 5,000 new cases in one day.

Andrew Cuomo, Governor of New York said on Monday that he may slow New York City’s broader Phase III reopening scheduled for Jul 6. This includes reopening indoor dining at restaurants and more personal-care services and outdoor activities. On the other hand, New Jersey’s governor on the same day announced that the state would postpone indoor dining indefinitely.

Investors keep a close watch on rise in new cases and administrations actions to curtail the spread of COVID-19. This would halt economic recovery if business activities are stalled or further lockdowns are ordered to address the public health crisis.

Thus, investors hope for a stimulus-backed economic rebound. Although a $3 trillion stimulus package was passed by the House of Representatives in May, the Senate has not yet taken up the package. And, administration is not expected to move toward another coronavirus bill or stimulus package anytime sooner.

Pending Home Sales Spikes in May

On Monday, the National Association of Realtors reported that pending home sales surged 44.3% in May, compared to the 21.8% decline in April. However, sales were 5.1% lower compared to the year ago period.

The organization also reported that rents have been falling in several parts of the country as millions of people are working from home during the pandemic.

Stocks that Made Headline

JPMorgan May Slash Dividend if Economic Condition Worsens

Following the annual stress test results announcement last week, JPMorgan JPM plans to maintain its dividend of 90 cents per share for third-quarter 2020. (Read More)

Citi Maintains Future Dividend Payments Amid Coronavirus Woes

Last week, the Federal Reserve released the results of Dodd-Frank Act supervisory stress test 2020 (DFAST 2020) conducted on 33 firms, which, to a great extent, reflect the stability of the banking system. (Read More)

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