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Stock Market News for Aug 6, 2020

Zacks Equity Research

Wall Street closed higher on Wednesday supported by some developments regarding Congressional negotiations on a second round of fiscal stimulus. Moreover, positive news on coronavirus treatment front also boosted market participants' sentiment. All three major stock indexes finished in green.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) finished in a positive note for four successive days after surging 1.4% or 373.05 points to close at 27,201.52. Notably, 19 components of the 30-stock blue-chip index ended in the green while 11 finished in red.

The tech-laden Nasdaq Composite ended in positive territory for six consecutive days to close at 10,998.40, rising 0.5%. This marked a new closing high for the tech-heavy index while in intraday trading, Nasdaq Composite attained a fresh all-time high at 11,002.11. This reflected the 31st all-time highs achieved by the index so far this year and its first-ever touch at 11,000 mark.

Meanwhile, the S&P 500 advanced 0.6% to end at 3,327.77. This marked the four-day winning streak of the broad-market index. The Industrials Select Sector SPDR (XLI), the Materials Select Sector SPDR (XLB) and the Financials Select Sector SPDR (XLF) climbed 1.9%, 1.5% and 1.4%, respectively.  Notably, seven out of eleven sectors of the benchmark index closed in positive territory while four in negative territory.

The fear-gauge CBOE Volatility Index (VIX) was down 0.8% to 22.99. A total of 10.09 billion shares were traded on Wednesday, lower than the last 20-session average of 10.43 billion. Advancers outnumbered decliners on the NYSE by a 2.47-to-1 ratio. On Nasdaq, a 2.14-to-1 ratio favored advancing issues.

Positive News from Coronavirus Treatment Front

Johnson & Johnson JNJ announced that the company has entered a deal with the U.S. government to supply 100 million doses for its potential coronavirus vaccine if it gets approval from the FDA. The size of the deal is more than $1 billion. The government have the option to order an additional 200 million doses.

Meanwhile, Novavax Inc. NVAX released data on the first human trial of its Covid-19 vaccine. The clinical trial data showed a positive immune response among patients.  Several analysts have called this data as extraordinarily promising.  Consequently, shares of Novavax jumped 10.4%. Novavax carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Developments on More Fiscal Stimulus

According to an unconfirmed report, the Trump administration and Congressional Democrats are working hard to reach a deal by this weekend regarding a second doses of fiscal stimulus to support the economy against coronavirus-induced devastations.

Meanwhile, both Democrats and Republicans have agreed on another round of $1,200 payments to support households. Meanwhile, President Donald Trump has agreed to provide another $25 billion of fiscal stimulus to the sagging airlines industry. 

Economic Data

The Institute for Supply Management reported that the U.S. services (nonmanufacturing) purchasing managers' index (PMI) for July came in at 58.1 compared with 57.1 in June. The consensus estimate was 55. Notably, any reading above 50 indicates expansion of services activities. Furthermore, 15 of the 18 industries tracked by ISM expanded in July.

The ISM reported that services production increased to 67.2 in July from 66 in June. Meanwhile, services orders rose to 67.6 in July from 61.6 in June. However, employment index decreased to 42.1 in July from 43.1 in June. Since the index is still below 50, implying job retrenchment in this sector. 

Automatic Data Processing reported that private payrolls increased by just 167,000 in July compared with 4.3 million in June and 3.3 million in May. Goods producers added only 1,000 jobs last month compared with 496,000 in June. Services producers added 166,000 jobs in July, down from 3.8 million in the prior month. Notably, small, midsized and large employers added 63,000, 25,000 and 129,000 jobs, respectively.

Stocks That Made Headline

Monster Beverage Stock Up on Q2 Earnings & Sales Beat

Shares of Monster Beverage Corp. MNST rose nearly 4% in the aftermarket trading session on Aug 4, following impressive second-quarter 2020 results. (Read More)

Marathon Oil Posts Narrower-Than-Expected Loss for Q2

Marathon Oil Corp. MRO reported second-quarter 2020 adjusted net loss per share of $0.60, narrower than the Zacks Consensus Estimate of a loss of $0.62, attributable to lower year-over-year U.S. production costs. (Read More)

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Click to get this free report Johnson Johnson (JNJ) : Free Stock Analysis Report Marathon Oil Corporation (MRO) : Free Stock Analysis Report Novavax, Inc. (NVAX) : Free Stock Analysis Report Monster Beverage Corporation (MNST) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research