S&P 500 Jumps To Record Closing High Amid Rebound On Wall Street

Stocks moved sharply higher over the course of the trading session on Friday, offsetting the weakness seen in the previous session. With the strong upward move, the S&P 500 reached a new record closing high.

The major averages pulled back off their highs going into the close but still ended the day firmly positive. The Dow surged up 399.64 points or 1.4 percent to 29,479.81, the Nasdaq jumped 119.70 points or 1 percent to 11,829.29 and the S&P 500 spiked 48.14 points or 1.4 percent to 3,585.15.

Despite the rally on the day, the major averages turned in a mixed performance for the week. While the Nasdaq fell by 0.6 percent, the S&P 500 shot up by 2.2 percent and the Dow soared by 4.1 percent.

The rebound on Wall Street partly reflected a positive reaction to earnings news from big-name companies like Cisco (CSCO) and Disney (DIS).

Shares of Cisco have surged up by 7.3 percent after the networking giant reported fiscal first quarter results that beat expectations on both the top and bottom lines.

Disney also posted a notable gain after the entertainment giant reported a much narrower than expected fiscal fourth quarter loss on revenues that exceeded analyst estimates.

Shares of DraftKings (DKNG) also moved sharply higher after the sports betting company reported better than expected third quarter results and raised its full-year revenue guidance.

On the other hand, shares of Revlon (REV) came under pressure after the cosmetics maker reported a third straight quarterly loss on a 20 percent drop in revenue.

The markets also seemed to benefit from news that President Donald Trump’s campaign continues to face setbacks in efforts to overturn the results of the presidential election, eliminating some of the lingering uncertainty about the outcome.

Traders also continue to express optimism about a potential coronavirus vaccine even as new cases in the U.S. spiked to another new record high.

Meanwhile, traders largely shrugged off a report from the University of Michigan showing an unexpected decrease in U.S. consumer sentiment in the month of November.

The preliminary report said the consumer sentiment index fell to 77.0 in November after rising to a seven-month high of 81.8 in October. The pullback came as a surprise to economists, who had expected index to inch up to 82.0.

“The outcome of the presidential election as well as the resurgence in covid infections and deaths were responsible for the early November decline,” said Surveys of Consumers chief economist Richard Curtin

“Interviews conducted following the election recorded a substantial negative shift in the Expectations Index among Republicans, but recorded no gain among Democrats,” he added. “It is likely that Democrats’ fears about the covid resurgence offset gains in economic expectations.”

A separate report from the Labor Department showed producer prices increased by slightly more than anticipated in the month of October.

Sector News

Airline stocks showed a substantial rebound on the day, with the NYSE Arca Airline Index soaring by 5.4 percent after plunging by 7.4 percent over the two previous sessions.

Significant strength was also visible among energy stocks, which regained ground despite a decrease by the price of crude oil. Crude for December delivery slumped $0.99 to $40.13 a barrel.

Reflecting the strength in the energy sector, the NYSE Arca Oil Index skyrocketed by 4.1 percent, the NYSE Arca Natural Gas Index spiked by 4 percent and the Philadelphia Oil Service Index surged up by 3.7 percent.

Computer hardware stocks also saw considerable strength on the day, resulting in a 3.1 percent jump by the NYSE Arca Computer Hardware Index.

Networking, steel, and housing stocks also showed notable moves to the upside amid broad based strength on Wall Street.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan’s Nikkei 225 Index fell by 0.5 percent, while China’s Shanghai Composite Index declined by 0.9 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.’s FTSE 100 Index slipped by 0.4 percent, the German DAX Index and the French CAC 40 Index edged up by 0.2 percent and 0.3 percent, respectively.

In the bond market, treasuries showed a lack of direction following the notable rebound seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 0.893 percent.

Looking Ahead

Next week’s trading may be impacted by reaction to the latest economic data, including reports on retail sales, industrial production, homebuilder confidence, housing starts, existing home sales and regional manufacturing activity.

On the earnings front, retail giants Walmart (WMT), Home Depot (HD), Target (TGT) and Lowe’s (LOW) are among the companies due to release their quarterly results next week.

Traders are also likely to keep an eye on the latest developments regarding the coronavirus pandemic, including potentially new restrictions and lockdowns.

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