US Stocks-Disney Magic Boosts Wall Street
The major U.S. stock indexes surged on Wednesday with the rally driven by a surprise quarterly profit from Disney and as investors remained optimistic that U.S. policymakers were moving closer to approving a coronavirus fiscal aid package.
Walt Disney Co.’s shares jumped, to put it among the biggest gainers in the S&P 500 and Dow. Shares of Disney notched their largest daily percentage gain since March 24 as revenue declines for Disney parks and media networks were not as bad as feared.
In the cash market on Wednesday, the benchmark S&P 500 Index settled at 3327.77, up 21.26 or +0.71%. The blue chip Dow Jones Industrial Average finished at 27201.52, up 373.05 or +1.48% and the technology-driven NASDAQ Composite closed at 10998.40, up 57.23 or +0.60%.
Financials, industrials and materials, that track economic growth, outperformed among the major S&P sectors.
With Wednesday’s strong rally, the S&P 500 closed less than 2% from its closing record on February 19. The huge recovery in the index since March 23 has been primarily driven by better-than-feared quarterly results, surging heavyweight technology and technology-related companies, and a massive amount of fiscal and monetary stimulus from the U.S. government and Federal Reserve.
U.S. Economic Data
Investors shrugged off the mixed economic reports on Wednesday. U.S. services activity gained momentum in July, according to an ISM survey, with new orders jumping to a record high. However, hiring declined, supporting views that a recovery in the labor market was faltering.
Shortly before the cash market opening, the ADP National Employment Report, which can be an inconsistent precursor to the government payrolls report set for Friday, showed U.S. private employers hired far fewer workers than expected last month.
Earnings Season Winding Down
With 384 companies in the S&P having reported earnings through Wednesday morning, results are coming in 23.5% above expectations, in aggregate, according to Refinitiv data, the highest on record back to 1994, Reuters reported.
US Coronavirus-Aid Update
U.S. Congressional Democrats and White House officials were set to resume negotiations on coronavirus relief legislation on Wednesday, with administration officials aiming for an agreement by Friday, according to Reuters.
Winners and Losers
Square Inc. surged after the payments processor reported a 64% rise in second-quarter revenue, as consumers increased online buying and used its peer-to-peer Cash App platform during the pandemic, Reuters reported.
Teladoc Health Inc. fell after agreeing to buy chronic care provider Livongo Health Inc. in a deal valuing the company at $18.5 billion, betting on a boom in online care and consultations spurred by the coronavirus crisis. Livongo shares also fell, Reuters said.
Electric truck maker Nikola Corp. slumped after it reported a bigger quarterly loss in its first results as a listed entity, according to Reuters.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
