Markets ended in the green on Monday following a broad-based rally in the tech stocks. Further, President Trump struck a deal with the leaders of the U.S. Congress to extend the debt limit by two years. The three major benchmarks ended in the green.
The Dow Jones Industrial Average increased 0.1%, to close at 27,171.9. The S&P 500 increased 0.3% to close at 2,985.03. The tech-laden Nasdaq Composite Index closed at 8,204.14, gaining 0.7%. The fear-gauge CBOE Volatility Index (VIX) decreased 8.4% to close at 13.24. Decliners outnumbered advancers on the NYSE by a 1.14-to-1 ratio. On Nasdaq, a 1.02-to-1 ratio favored declining issues.
How Did the Benchmarks Perform?
The Dow added 17.7 points to close in the green. Gains for the 30-stock index were broad-based. Shares of Apple AAPL and Intel INTC increased 2.3% and 2.2%, respectively and supported gains for the Dow. While Apple carries a Zacks Rank #3 (Hold), Intel holds a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The S&P 500 rose 8.4 points to end in positive territory. Of the 11 major sectors of the S&P 500, six ended in the green, with technology stocks leading the advancers. The Technology Select Sector SPDR Fund (XLK) increased 1.2% on Monday.
Meanwhile, the Nasdaq advanced 57.7 points to also close in the green. Gains for the Nasdaq were supported by a broad-based rally in tech stocks. Expectations of better-than-expected earnings results from the FANG stocks later this week boosted the overall tech sector.
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.
Stocks That Made Headlines
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