S&P 500 Hits Another Record Closing High After Strong Economic Data

TOPLINE

Stocks finished higher on Friday, with the S&P 500 hitting another new record high after manufacturing and housing data both came in stronger than expected.

KEY FACTS

The Dow Jones Industrial Average was up 0.7%, nearly 200 points, on Friday, while the S&P 500 rose 0.4% and the tech-heavy Nasdaq Composite gained 0.4%.

The S&P 500 finished at 3,397.24, a new record close, after the index originally surpassed its peak from February and recovered its losses from the coronavirus pandemic on Tuesday.

IHS Markit data showed that U.S. manufacturing activity in August hit its highest level in 19 months, while services hit its highest level in 17 months amid higher client demand.

Existing home sales in July saw a record spike of nearly 25% from the previous month, with the average selling price for homes also hitting an all-time high.

Market sentiment was kept in check by ongoing concerns about a lack  of progress on the next coronavirus stimulus bill: Democrats and Republicans have been stuck in a stalemate for weeks.

Crucial quote

“It might be hard to recall after a long week, but the S&P closed at a record high on Tuesday in one of the fastest rebounds – after one of the fiercest bear markets – in history,” says Lindsey Bell, chief investment strategist for Ally Invest. “Record highs usually bring momentum with them,” she adds.

Key background

Friday’s gains closed out a week in which the market reached a record milestone. Stocks initially opened lower on Thursday after another 1.1 million Americans filed for unemployment amid the coronavirus pandemic, but stocks pared back losses and finished positive thanks to a rally in Big Tech stocks. The S&P 500 briefly hit a new intraday record high on Wednesday before stocks turned negative late in the day after the Federal Reserve released the minutes from its July meeting. Fed officials said that the coronavirus pandemic will continue to “weigh heavily” on the U.S. economy, which continues to remain “well below” of its pre-pandemic levels.

Further reading

Stocks Finish Higher As Tech Rally Offsets Disappointing Unemployment Data (Forbes)

Stocks Turn Negative After Federal Reserve Says U.S. Economy Still ‘Well Below’ Pre-Pandemic Levels (Forbes)

These 10 Stocks Are All Up More Than 140% Since The Coronavirus Sell-Off (Forbes)

Apple Becomes First U.S. Company Worth More Than $2 Trillion (Forbes)

Full coverage and live updates on the Coronavirus

Comments are closed.