S&P 500 trades near record high but Dow flat as Wall Street investors search for fresh stock-market spark – MarketWatch

U.S. stock benchmarks mostly rose Monday afternoon, with the S&P 500 index trading near record territory but struggling to shoot substantially higher, amid a congressional stalemate over fresh stimulus to help Americans and businesses hurt by the coronavirus pandemic.

How are major indexes doing?

The Dow Jones Industrial Average DJIA, -0.20% was trading 64 points, or 0.2%, lower at around 27,868, weighed lower by a decline in shares of Boeing Co. BA, -2.79% and Goldman Sachs Group Inc. GS, -2.05%. The S&P 500 index SPX, +0.37% was climbing 12 points to reach 3,385, a gain of 0.4%, near its record closing peak at 3,386.15. Meanwhile, the Nasdaq Composite Index COMP, +1.07% rose 107 points, or 1%, at about 11,26.

Read:If history repeats, the stock market will set a new high by the end of August

On Friday, the Dow gained 1.8% for the week, the S&P 500 booked a weekly advance of 0.6%. Friday’s gain turned the Nasdaq barely positive for the week, up 0.1%.

What’s driving the market?

Stocks struggled to shoot substantially higher Monday afternoon, with strategists saying a broader market rally outside of highflying technology stocks likely will be needed for the S&P 500 to make a sustained push above its prior record.

“Today we’re still looking at this headwind around another fiscal package being passed, and some skepticism about that getting done,” said Joe Quinlan, head of CIO market strategy at Merrill and Bank of America Private Bank, in an interview.

“But the key is breadth,” he said. “We want to see that improve.”

“While the S&P 500 is within 1% of the all-time high from February, several attempts last week to break through to a new high failed. With earnings season largely over and fiscal stimulus unlikely for at least a month, markets lack a catalyst to help markets overcome technical resistance,” wrote Mark Hackett, chief of investment research at Nationwide, in a note.

Moves for the equity market come against the backdrop of failed negotiations between Democrats and Republicans centered on advancing a new package of aid to help laborers affected by the COVID-19 pandemic after $600 a week in unemployment assistance were halted at the end of last month.

“While aid for state and local governments and enhanced unemployment aid remain the most contentious issues, funding for the USPS ahead of mail-in voting has emerged as a new issue,” Hackett wrote.

Democratic House Speaker Nancy Pelosi said on Sunday that she would call the House back into session to address funding for the U.S. Postal Service, as funding for the organization has become a hot-button issue ahead of the Nov. 3 election.

Investors are doubtful that a V-shaped, or quick and powerful, recovery can be achieved without new support for those out of work, but the market’s tepid climb also suggests that bets are being made that an agreement will be achieved eventually.

Meanwhile, the U.S. reported just over 42,000 new COVID-19 cases for Sunday, down from a one-week average of 51,523 daily cases, according to New York Times data. The nation’s total number of cases surpassed 5.4 million, about a quarter of the world-wide total.

Elsewhere on Monday, New Zealand, where the outbreak has been under control for much of the pandemic, delayed its elections by about a month after an outbreak in Auckland put a third of voters into lockdown.

In economic reports, a reading on business conditions in the New York area, the Empire State index, fell 13.5 points to 3.7 in August, signaling a slower pace of growth, the regional Fed bank said Monday. Economists had expected a reading of 17, according to a survey by Econoday. The index had surged in July after being in negative territory since the pandemic began.

Separately, a report on home-builder confidence was much stronger than expected, coming out slightly earlier than had been expected on Monday than the scheduled 10 a.m. Eastern release. Builder confidence in the newly built, single-family home market jumped six points to 78 in August on the National Association of Home Builders/Wells Fargo Housing Market Index, with the reading hitting the highest level on record for the report. Builder sentiment plunged to 30 in April. A reading above 50 is considered upbeat.

Which stocks are in focus?
  • Tesla Inc.’s stock TSLA, +9.14% climbed 8.1% Monday, after analyst Dan Ives at Wedbush raised his price target to $1,900 from $1,800, citing continued signs of accelerating demand in China.
  • Shares of Nvidia Corp. NVDA, +6.79% rose nearly 7% toward a record Monday, after Susquehanna analyst Christopher Rolland raised his price target to a Street high $540 from $450.
  • Shares of JD.com Inc. JD, +6.61% rose 5% Monday, after the China-based e-commerce company reported a second-quarter profit and revenue that rose above expectations, as active customer accounts showed continued improvement.
  • Domino’s Pizza Inc. DPZ, +2.23% said Monday that it will hire 20,000 new workers nationwide to fill positions including assistant manager, customer service representative and pizza maker. Shares were up 1.8% on Monday.
  • Apple’s stock AAPL, +0.17% dipped 0.4% after earlier heading toward a record close and a market value nearing $2 trillion, despite its dust-up with Fornite developer Epic Games.
  • Rackspace Technology Inc. RXT, +12.89% shares rallied 14.2% Monday following a Reuters report that Amazon.com Inc. AMZN, +1.17% was in early talks to invest in the cloud-technology services company.
  • Novavax NVAX, +5.41% shares were 3.7% higher after the company said it’s beginning a Phase 2b clinical trial in South Africa to evaluate the efficacy of NVX-CoV2373, its COVID-19 vaccine candidate. The Bill & Melinda Gates Foundation providing $15 million grant toward trial.
  • American Express Co. AXP, -2.67% shares were down 2.2% after it announced its plans to acquire “substantially all” of Kabbage, a financial technology company that does small business lending. Amex announced the deal for Kabbage, which includes everything but the company’s preexisting loan portfolio.
How are other markets trading?

In Asia Monday trade, China’s CSI 300 index 000300, +2.35% closed 2.4% higher, while Hong Kong’s Hang Seng Index HSI, +0.65% advanced 0.7% and Japan’s Nikkei 225 NIK, -0.82% declined 0.8%.

In Europe, the Stoxx 600 Europe Index SXXP, +0.32% wrapped up the session 0.3% higher, while the U.K.’s FTSE 100 UKX, +0.61% finished 0.6% higher.

The 10-year Treasury note TMUBMUSD10Y, 0.679% was off 4 basis points at 0.67%. Bond prices move inversely to yields.

Gold prices for December delivery headed higher GCZ20, +2.16% up 2.4%, trading near $2,000 at $1,997 an ounce. Crude-oil prices CLU20, +2.04% gained 1.1% at $42.49 a barrel.

The ICE U.S. Dollar Index, DXY, -0.24% a gauge of the buck against a half-dozen major rivals, was down 0.2% to 92.90.

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