Improving economic data pushed U.S. stock market indexes into the green, while tech giant Apple fueled the Nasdaq composite to anther record high, plus more in today’s Closing Bell on Money & Markets.
The Top Story
All three major U.S. stock market indexes traded higher Tuesday as investors celebrated more improving economic data along with the chance of another round of coronavirus stimulus.
“People are feeling good about the economy, not concerned about rising coronavirus cases and not being overly concerned about the election. The beat goes on,” said Bob Doll, chief equity strategist at Nuveen.
The Nasdaq rose 0.7%, and closed at its fifth record high this month thanks in large part to Apple Inc. (Nasdaq: APPL). At least three brokerage firms have upped their price targets for the iPhone maker after it announced it was going to create its own chips for Mac computers. Shares of Apple rose 2.1%.
The S&P 500 rose 0.43% in the afternoon and is now roughly 7% off its Feb. 19 record high. Eight of 11 major sub-indexes were higher. Real estate and utilities, both defensive sectors, lagged the rest of the index. Consumer staples also fell late.
“If people are feeling more OK about the world, you don’t want to own the more defensive stocks,” Doll said. “You want to own stocks that can benefit from an improving economy.”
White House economic adviser Lawrence Kudlow mentioned tax rebates and another round of stimulus checks could be included in a fourth COVID-19 stimulus package. Legislation may not pass until next month, though.
The Dow Jones Industrial Average closed 0.5% higher.
Stock Market Update: Closing Bell*
S&P 500: 3,131 (+0.43%)
DOW: 26,156 (+0.50%)
NASDAQ: 10,131 (+0.74%)
RUSSELL: 1,440 (+0.48%)
GOLD: $1,768.90 (+0.83%)
BITCOIN: $9,647.72 (+0.65%)
U.S. 10-YEAR YIELD: 0.71% (+0.009)
*- as of 4:15 p.m.
A Big Win
We told you to watch Spirit AeroSystems Holdings Inc. (NYSE: SPR) in this morning’s Opening Bell after it was asked to scale back production of parts for Boeing Co.’s (NYSE: BA) 737 Max aircraft. Shares tanked over 13% by Tuesday afternoon.
We also mentioned the mobile payment company Square Inc. (NYSE: SQ). Shares rose over 3% Tuesday morning before a sell-off in the early afternoon. The stock closed 0.5% higher.
Golden Nuggets
Gold surged to its highest level since October 2012, driven by a weaker U.S. dollar and widespread monetary stimulus from central banks around the world.
U.S. spot gold was up 0.84% to $1,769 per ounce around 4:15 p.m. EDT. Gold is up almost 16% in 2020.
“The tsunami of stimulus coming in from everywhere is not only inflationary but also painting a weaker picture for the economy and making gold look attractive,” said Edward Meir, an analyst at ED&F Man Capital Markets.
Gold futures were healthy as well, trading 1% higher. Silver futures were also up 1.2% to $18.05 per ounce. Palladium and platinum lagged other metals, trading flat in the late afternoon.
Cannabis Corner
Aurora Cannabis Inc. (NYSE: ACB) stock rose more than 10% this morning before crashing into the negative after announcing layoffs. The company is shuttering five production facilities in addition to laying off 700 workers and taking a $60 million charge for the quarter ending June 30.
CEO Michael Singer emphasized the restructuring is a “strategic realignment” and not a “cost-cutting” move.
Curaleaf Holdings (OTCMKTS: CURLF), a vertically integrated cannabis operator, signed an amended agreement for its acquisition of GR Companies Inc., more commonly known as Grassroots Cannabis.
The original cash and stock transaction was announced in July 2019, but the $875 million deal was struck before cannabis stocks took a beating. GMP analysts project the new deal to be worth $700 million, according to Marijuana Business Daily.
Wall Street Likely to Cut Bonuses, Make Significant Layoffs
Wall Street is facing 15-20% bonus cuts and significant layoffs, according to a Johnson Associates Inc. report.
“With the impact of COVID-19 and recent focus on justice and equality, it will require a thoughtful analysis and balance of performance, competitive and societal priorities, and customer and employee expectations,” Johnson wrote. “This is not a year to be tone deaf.”
Today’s Big Winners
S&P 500: Mohawk Industries Inc. (NYSE: MHK) +12.6%
Nasdaq: Expedia Group Inc. (Nasdaq: EXPE) +4.2%
Dow: Apple Inc. (Nasdaq: APPL) +2.1%
Today’s Big Losers
S&P 500: American Airlines Group Inc. (Nasdaq: AAL) -6.2%
Nasdaq: American Airlines Group Inc. (Nasdaq: AAL) -6.2%
Dow: International Business Machines Corp. (NYSE: IBM) -1.3%
Check back for the most important news and numbers each day after the Closing Bell, only on Money & Markets.