Wall Street stocks began the week heading north, with the S&P 500 and the Nasdaq Composite hitting new record highs, as investors cheered prospects of a new covid-19 treatment. The 30-stock Dow Jones index wiped off losses and turned positive for the year last week.
Market sentiment was driven by news of the US FDA (Food and Drug Administration) authorizing the use of convalescent plasma from covid-19 recovered patients as another treatment option for the deadly virus. Separately, the Trump administration also considering fast-tracking a vaccine candidate from the UK.
Sentiment was also supported by a decline in daily covid-19 cases in the US, which has remained below the 50,000 mark since mid-August. The resumption of US-China trade talks also provided some relief to investors, with representatives from both countries expressing their commitment to the success of Phase I of the trade deal.
The Dow is scheduled to implement the shakeup announced on August 25, marketing the most significant change to the 30-stock benchmark in seven years. The restructuring would see the following replacements:
- ExxonMobil will be replaced by Salesforce.com
- Raytheon Technologies is to be replaced by Honeywell International
- Pfizer will be replaced by Amgen
Performance of US Indices
US stocks closed higher on Friday, with the Dow Jones erasing losses for 2020. The S&P 500 and Nasdaq indices continued their rally, hitting new record closes, as investors cheered upbeat economic data. Federal Reserve Chairman Jerome Powell’s announcement of a change in policy, allowing interest rates to remain close to the current levels to support higher inflation, also supported market momentum.
The Dow Jones Industrial Average rose 0.6% to close at 28,653.87 on Friday. After closing broadly flat the previous week, the index climbed 2.6% last week. The S&P 500 index added 3.3%, while the Nasdaq Composite Index recorded a 3.4% gain last week.
Top US Stocks of the Week
JM Smucker Co’s (NYSE: SJM) shares climbed 7% on Tuesday after the company posted better-than-expected quarterly results and raised its earnings projections.
Amgen, Inc’s (NASDAQ: AMGN) stock gained more than 5% on Tuesday as Apple’s stock split led to the company’s inclusion in the Dow Jones Industrial Average. Amgen’s shares climbed 7% last week.
Shares of Honeywell International Inc. (NYSE: HON) gained more than 3% after the company’s stock replaced Raytheon Technologies in the Dow Jones Industrial Average. Honeywell’s shares ended the week higher by 7%.
Salesforce.com, Inc’s (NYSE: CRM) shares spiked around 26% on Wednesday as the company posted stronger-than-expected Q2 results and issued upbeat guidance for the fiscal year. The stock was also lifted by its addition to the Dow Jones Index, and ended the week with more than 30% gains.
Shares of Urban Outfitters, Inc. (NASDAQ: URBN) rose more than 21% on Wednesday after the company swung to profits in the latest quarter.
Hewlett Packard Enterprise Co’s (NYSE: HPE) shares climbed around 4% on Wednesday after the company released upbeat Q3 results. HPE’s stock surged over 5% last week.
Shares of Abbott Laboratories (NYSE: ABT) surged 8% on Thursday after the company’s new covid-19 test received FDA Emergency Use Authorization.
Abercrombie & Fitch Co’s (NYSE: ANF) shares gained 8% following strong Q2 results. The stock climbed around 22% last week.
Performance of European Indices
European stocks closed mostly lower on Friday, as the euro made a sharp recovery after the Fed’s announcement of a policy shift. News of Japanese Prime Minister Shinzo Abe’s resignation led to choppy trading on the last day of the week.
Despite declining 0.5% on Friday, the Stoxx Europe 600 Index closed the week higher by 1%. The German DAX 30 slipped 0.5% on Friday, but still gained 2.1% for the week. The French CAC 40 spiked 2.2%, while the FTSE 100 index declined 0.6% last week.
Top European Stocks of the Week
Shares of BT Group gained about 7% on Monday after reports of the company trying to defend itself against possible suitors.
Shares of Bunzl rose 3% on Monday, after the company reinstated its dividend and announced two acquisitions.
Shares of Ambu slid 13% on Wednesday, after the Danish firm posted weak revenues for the latest quarter and cut its profit guidance for the full year.
Elekta’s shares climbed 11% after the Swedish company reported better-than-expected quarterly earnings.
The Forex Market
The euro spiked versus the US dollar last week, climbed past the 1.19 level again. The surge in the shared currency was driven by US Fed Chair Jerome Powell’s announcement of a shift in policy strategy. Eurozone’s services confidence indicator rose to -17.2 in August, surpassing expectations of a reading of -24.4. After gaining 0.7% on Friday, the EUR/USD closed the week up around 1%.
The yen climbed versus the US dollar on Friday after Japanese Prime Minister Shinzo Abe reported his resignation citing health reasons. The Japanese yen surged 1.1% versus the greenback on Friday and ended the week higher by 0.4%.
The Crypto Market
Last week was eventful for the crypto market, with the US central bank’s initiation of a change in monetary policy.
Despite the volatility during the week, Bitcoin traded below the previous weekend’s level. The crypto king was trading around $11,628 this morning, while the Ethereum had breached the $427 mark.