Before The Bell
The major stock market averages began the week in mixed fashion as an impressive rise in the Dow Jones Industrials contrasted a modest decline in the tech-laden NASDAQ.
That marked a switch from the broader trend in place this year, as the NASDAQ and tech shares have dominated the performance charts.
But that trend has hit some bumps in the road lately, as recent executive orders from the White House toward China-based companies have raised concerns about retaliation against U.S. companies.
Then, too, while valuations have not been of great concern with interest rates so low, the big rally in tech has made some of the leading stocks in the group look a bit pricey.
The shift in sentiment did not affect shares of Apple (AAPL), though, which continued their imposing advance.
But the day belonged to more traditional stocks, particularly those in cyclical areas of the economy, such as in the energy and industrial sectors. Shares of FedEx (FDX) continued their resurgence, as the delivery giant has flexed a degree of pricing power.
Even so, there was not much in the way of fresh data to lift stocks on a quiet Monday in August with earnings season winding down.
The closely watched government employment report on Friday did reveal some improving trends in the labor market. The number of jobs added in July rose more than expected, and the unemployment rate fell more than anticipated. But the still-high unemployment rate of 10.2% showed that the recovery has a long way to go.
Negotiations in Congress regarding another stimulus package have also stalled, with a wide gap in the size of the deal a sticking point.
The White House is aiming to make up for the lack of legislation for aid to Americans financially hurt by the coronavirus pandemic by deferring the payroll tax and extending payments to jobless workers.
These actions would likely account for much less than an act of Congress, though. As a result, it would appear that investors are still holding out hope that the House of Representatives and the Senate will come to an agreement on a stimulus bill. That may prove the case, especially if additional strains on businesses and consumers materialize.
Signs of a slowing rate of new virus cases in the U.S. also offered encouragement.
At the end of the session, the Dow was up 358 points and the S&P 500 gained nine points, but the NASDAQ lost 43 points.
- Robert Mitkowski
At the time of this writing, the author did not have positions in any of the companies mentioned.
