COVID Cases Surge Cause Additional Layoffs

Here is a daily recap of the S&P 500 broken down by sector followed by sector heat map as COVID cases surge cause additional layoffs. Stocks in heat map are based on the top 10 holdings of each sector ETF. Click on each picture to zoom in. Below is a summary of today’s action on Wall Street provided by CNBC:

Stock futures hold steady, Microsoft sheds 2.6% after reporting earnings

Futures contracts tied to the major U.S. stock indexes held steady at the start of the overnight session Wednesday evening as investors parsed through a slew of corporate earnings during an otherwise positive week. Dow Jones Industrial Average futures fell 15 points at the start of the overnight session, implying a slight opening loss when regular trading resumes on Thursday.

The S&P 500 (SPY) dropped -1.23% today. Sector decliners led advancers 8 to 3 as shown below in the sector graph. Losses ranged from -2.60% to less than 1%. Consumer staples (XLP), financials (XLF) and utilities (XLU) each enjoyed minor gains of less than 1%.

The Dow Jones index declined -353 points (-1.31%) to close at 26,652. The Nasdaq sunk -244 points (-2.29%) to settle at 10,461.

COVID Cases Surge Cause Additional Layoffs

Stock fell into the red Thursday as gloomy unemployment data led to a tech selloff.

Microsoft shares were down by 4.3% despite reporting better-than-expected earnings for the previous quarter. Though the company’s results were largely positive, Microsoft said its transactional license purchasing continued to slow and that subsidiary LinkedIn was negatively impacted by the weak job market.

Apple traded 4.5% lower, while Amazon and Netflix dropped 3.6% and 2.5%, respectively. Tesla, meanwhile, gave back its earlier gains and fell nearly 5% despite reporting earnings that blew past analyst expectations. Elon Musk’s automaker also said it’s set “for a successful second half” and reiterated its goal of delivering 500,000 vehicles this year.

U.S. weekly jobless claims came in at 1.416 million for last week, marking the 18th straight week in which initial claims totaled more than 1 million. Economists expected another 1.3 million workers to have filed initial claims for state unemployment benefits, according to Dow Jones.

The surge of COVID cases in the Sun Belt and the stalling out of reopening activities in other states has seemingly caused another round of layoffs that has stymied the nascent labor market recovery,” said Thomas Simons, money market economist at Jefferies, in a note.

This stalling in the labor market comes as lawmakers work on an additional stimulus package for those impacted by the coronavirus pandemic.

On Wednesday, sources told CNBC that Republicans were considering extending a $600-per-week unemployment benefit at a reduced rate of $100 per week. On Thursday, Treasury Secretary Steven Mnuchin said an extension in unemployment benefits will be based on “approximately 70% wage replacement.”

Key Takeaway…

Notable S&P 500 Movers…

Below I’ve highlighted some notable S&P 500 movers (both winners & losers).

Credit: Sector Graph provided by Sector SPDR app. Sector breakdown provided by Charles Schwab. Sector heat map provided by finviz. Information Credit: News Headlines and quotes were taken from CNBC in the writing of this post.

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7/23/20

S&P 500 Sector Graph

COVID Cases Surge Cause Additional Layoffs

S&P 500 (SPY)

COVID Cases Surge Cause Additional Layoffs

Communication Services (XLC)

COVID Cases Surge Cause Additional Layoffs

Episode 1: Basic Investment Strategy – Simply Stock Info: The Podcast

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Consumer Discretionary (XLY)

COVID Cases Surge Cause Additional Layoffs

Consumer Staples (XLP)

COVID Cases Surge Cause Additional Layoffs

Energy (XLE)

COVID Cases Surge Cause Additional Layoffs

Financials (XLF)

COVID Cases Surge Cause Additional Layoffs

Real Estate (XLRE)

COVID Cases Surge Cause Additional Layoffs

Healthcare (XLV)

Industrials (XLI)

Materials (XLB)

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Technology (XLK)

COVID Cases Surge Cause Additional Layoffs

Utilities (XLU)

S&P 500 Sector Heat Map

 

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