Investors remain in a cautious mood after yesterday’s pronouncement from the Fed that we still have a difficult road to recovery. This was reflected in the modest jump of 46 points on the Dow even though the S&P and Nasdaq did markedly better, mostly on the strength of Apple becoming the first publicly listed company in history to pass the $2 trillion mark in value. The cautionary note remains that jobless claims rose above the million mark again but this should not have surprised anyone since the only reason it dipped in the first place was the expiration of the extension of jobless benefits. (When they are finally reinstated, jobless claims will rise again even more.)  The good news is that, though some experts feel “the market is getting a little too exuberant,” since stocks reflect not the current state of affairs but how investors feel about the prospects for the future, we can take heart that they feel the future is hopeful. As caution is the dominant sentiment, volume remains below average at 8.9 billion. 

thu  AUGUST 20, 2020 / 4:32 pm 

Nasdaq closes at all-time high as strong tech sector offsets jobless data

Gertrude Chavez-Dreyfuss

DJ: 27,692.88  -85.19        NAS: 11,146.46  -64.38         S&P: 3,374.85  -14.93      8/19

DJ: 27,739.73  +46.85        NAS: 11,264.95  +118.49      S&P: 3,385.51  +10.66     8/20

NEW YORK (Reuters) - Nasdaq ended at a record high on Thursday, with the S&P 500 and Dow also rising, as gains in heavyweight tech stocks outweighed downbeat data that affirmed the Federal Reserve’s view of a difficult road to economic recovery.  Gains in Apple Inc - the only publicly listed U.S. company to cross the $2 trillion market value milestone - Amazon.com Inc and Microsoft Corp underpinned the three main indexes’ gains as investors bet they would ride out the economic crisis.

The Dow Jones Industrial Average ended up 46.85 points, or 0.17%, to 27,739.73, the S&P 500 gained 10.66 points, or 0.32%, to 3,385.51 and the Nasdaq Composite added 118.49 points, or 1.06%, to 11,264.95.

Stocks had opened lower on data that showed jobless claims rose unexpectedly back above the 1 million mark last week after slipping below that level for the first time since the start of the pandemic.  Separate data from the Philadelphia Fed showed a business conditions index fell more than expected in August.  The volatility in jobless claims followed the lapse of an extra $600 weekly unemployment benefit at the end of July and came as Democrats in Congress have failed to reach an agreement with the White House on extending it.

“Investors are looking through this downturn towards a point where we will begin to get a recovery especially with the Federal Reserve backstopping the companies,” said Brian Reynolds, chief market strategist at Reynolds Strategies.  “Whether it’s right or wrong, that’s the way it is. Though, I think the market is getting a little too exuberant,” he added.

Nasdaq clocked its 19th record closing high since early June, when it confirmed its recovery from the coronavirus sell-off. Thursday’s record close was its 35th so far this year compared with 31 record closing highs in 2019 and 29 in 2018.  Despite signs that parts of the economy are still far away from pre-pandemic levels, the benchmark S&P 500 index completed its fastest recovery from a bear market this week, joining the Nasdaq in scaling new peaks. It also confirmed a bull market for the S&P 500.  The S&P 500 and Nasdaq retreated on Wednesday after minutes from the Fed’s latest policy meeting gave a somber assessment of the U.S. economy as it grapples with the pandemic but ruled out, for now, more dovish easing policy measures.

Economically sensitive financial and energy sectors were some of the biggest percentage losers among the major S&P sectors.  Nvidia Corp was little changed at $485.64 after posting better than expected quarterly sales forecast.  Intel Corp rose 1.7% to $49.17 after announcing a $10 billion share buyback plan.  Shares of Tesla surged past the $2,000 mark on Thursday for the first time as the electric car maker extended its recent rally ahead of an upcoming share split.  L Brands Inc advanced 3.8% to $29.57 after reporting a surprise quarterly profit, boosted by strong demand for Bath & Body Works’ products as well as higher online sales of Victoria’s Secret lingerie.

Declining issues outnumbered advancing ones on the NYSE by a 1.54-to-1 ratio; on Nasdaq, a 1.46-to-1 ratio favored decliners.  The S&P 500 posted 18 new 52-week highs and no new lows; the Nasdaq Composite recorded 66 new highs and 28 new lows. 

Again, there was no volume data given in this or other reports today but, per the CBOE, 8.9 billion shares were traded on the major exchanges today.