After ending the previous session mostly higher, stocks saw further upside over the course of the trading day on Friday. The continued upward move on the day lifted the Nasdaq and the S&P 500 to new record closing highs.
The major averages all finished the day firmly in positive territory. The Dow advanced 190.60 points or 0.7 percent to 27,930.33, the Nasdaq climbed 46.85 points or 0.4 percent to 11,311.80 and the S&P 500 rose 11.65 points or 0.3 percent to 3,397.16.
For the week, the tech-heavy Nasdaq soared by 2.7 percent and the S&P 500 advanced by 0.7 percent, while Dow was nearly flat.
The strength on Wall Street came following the release of a report from IHS Markit showing U.S. business activity expanded at the fastest pace in over a year in the month of August.
The IHS Markit flash composite index of purchasing managers at manufacturers and service providers climbed to an eighteen-month high of 54.7 in August from 50.3 in July.
The increase by the index came as the IHS Markit reading on manufacturing activity reached a nineteen-month high, while the reading on service sector activity indicated growth for the first time since January.
Adding to the positive sentiment, the National Association of Realtors released a report showing existing home sales in the U.S. continued to soar in the month of July.
NAR said existing home sales skyrocketed by a record 24.7 percent to an annual rate of 5.86 million in July after spiking by 20.2 percent to a revised rate of 4.70 million in June.
Economists had expected existing home sales to jump by 14.0 percent to an annual rate of 5.38 million from the 4.72 million originally reported for the previous month.
“The housing market is well past the recovery phase and is now booming with higher home sales compared to the pre-pandemic days,” said Lawrence Yun, NAR’s chief economist.
Housing stocks showed a strong move to the upside following the existing home sales data, driving the Philadelphia Housing Sector Index up by 1.6 percent.
Significant strength was also visible among computer hardware stocks, as reflected by the 1.1 percent gain posted by the NYSE Arca Computer Hardware Index.
Apple (AAPL) helped to lead the sector higher, with the tech giant surging up by 5.2 percent to a new record closing high.
On the other hand, oil service stocks moved sharply lower on the day, dragging the Philadelphia Oil Service Index down by 3.4 percent.
The sell-off by oil service stocks came amid a decrease by the price of crude oil, as crude for October delivery fell $0.48 to $42.34 a barrel.
A decrease by the spot gold price also weighed on gold stocks, resulting in a 2.3 percent slump by the NYSE Arca Gold Bugs Index.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan’s Nikkei 225 Index crept up by 0.2 percent, while China’s Shanghai Composite Index climbed by 0.5 percent.
Meanwhile, the major European markets moved to the downside on the day. While the German DAX Index fell by 0.5 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index dipped by 0.3 percent and 0.2 percent.
In the bond market, treasuries showed a lack of direction before ending the session nearly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 0.640 percent.
Economic data may continue to attract attention next week, with traders likely to keep an eye on reports on new home sales, consumer confidence, durable goods orders, and personal income and spending.
A speech by Federal Reserve Chair Jerome Powell may also be in focus, as the central bank chief speaks at a virtual edition of the Fed’s annual Jackson Hole symposium.
Source: Read Full Article