Negative Headlines Cap Big Tech Rally

Here is a daily recap of the S&P 500 broken down by sector followed by sector heat map as negative headlines cap big tech rally. 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:

Tech stocks set to lead market higher Friday after the big four post blowout earnings, QQQ gains 1%

Wall Street was primed for a market rally to end the week as some of the biggest tech stocks – Facebook, Amazon, Alphabet and Apple – reported quarterly results that beat high expectations. The Invesco QQQ Trust, which tracks the Nasdaq 100 index, jumped more than 1% in after-hours trading Thursday.

The S&P 500 (SPY) rose +0.77% today. Sector advancers led decliners 6 to 5 as shown below in the sector graph. Gains ranged from +2.50% to less than 1%. 5 sectors had losses of less than 1%, check the sector graph for specifics.

The Dow Jones index added +114 points (+0.44%) to close at 26,428. The Nasdaq climbed +157 points (+1.49%) to settle at 10,745.

Negative Headlines Cap Big Tech Rally

Stocks finished in the green Friday as equities got a boost from blowout big tech earnings. However, negative headlines capped the big tech rally from bigger gains.

Headlines weighed on the broader market Friday:

  • Emergency unemployment benefits are set to expire Friday and Congress and the White House still seem far apart on an agreement. White House Chief of staff Mark Meadows said Democratic leaders have rejected four offers regarding the coronavirus relief bill.
  • Dow-component Chevron fell more than 4% after the oil giant reported an $8.3 billion loss in the second quarter as the pandemic “significantly reduced demand.”
  • Consumer sentiment deteriorated this month amid a resurgence in new coronavirus cases. University of Michigan’s consumer sentiment index came in at 72.5 for July, down from June’s 78.1 and below Dow Jones estimates of 72.7.
  • Stocks linked to an economic recovery like banks and retailers were lower as investors assessed the biggest quarterly gross domestic product contraction on record and persistently weak job growth. JPMorgan and Home Depot were both in the red.
  • There could be a so-called sell-the-news effect now that technology companies have delivered strong results to back up their market-leading run.

Big Tech Blowout Earnings

Apple reported a blowout quarter, sending shares up more than 10% to a new all-time high. The company said its overall sales expanded by 11%, and Apple also announced a 4-for-1 stock split.

Amazon, meanwhile, traded 5% higher as the company saw its sales skyrocket during the coronavirus pandemic. Facebook shares rallied more than 7% as the social media giant posted revenue growth of 11% even amid the coronavirus pandemic slowdown. The company also issued stronger-than-expected sales guidance for the current quarter.

Google-parent Alphabet also posted better-than-expected earnings, but the company’s overall revenue declined for the first time in its history. Revenue for Google Cloud were also just below analyst expectations. Alphabet shares fell more than 4%.

Big Tech has been the stalwart on Wall Street this year. Amazon and Apple are up 65% and 31%, respectively, in 2020. Facebook and Alphabet have risen more than 14% over that time period.

The major U.S. equity averages are looking to wrap up the month of July with solid gains. The S&P 500 has gained 4.7% this month through Thursday’s close, on track for its fourth consecutive positive month. The Dow and the Nasdaq Composite have gained 1.9% and 5.2%, respectively, month to date.

Key Takeaways…

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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7/31/20

S&P 500 Sector Graph

Negative Headlines Cap Big Tech Rally

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Negative Headlines Cap Big Tech Rally

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Negative Headlines Cap Big Tech Rally

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Negative Headlines Cap Big Tech Rally

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S&P 500 Sector Heat Map

 

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