You are using an older browser version. Please use a supported version for the best MSN experience.

Dow Hits 35000 as Stocks Rise to Records

The Wall Street Journal. logo The Wall Street Journal. 7/23/2021 Caitlin McCabe, Joe Wallace
a man holding a laptop © brendan mcdermid/Reuters

U.S. stocks rallied Friday, pushing the Dow Jones Industrial Average across the 35000 closing milestone for the first time, in a striking rebound from major indexes’ pullback earlier this week.

All three major U.S. stock indexes finished Friday at all-time highs after each posted weekly gains of more than 1%.

At the start of the week, all three indexes had dramatic falls. On Monday, the Dow slid roughly 725 points, or more than 2%, as anxiety mounted over the Delta variant of the coronavirus. Investor concern over the U.S. economy’s potential slowing exacerbated the fall.

By Tuesday, stocks sharply reversed course, kicking off a four-day streak of gains. With Monday’s pullback in the rearview mirror, investors turned their attention to a string of strong earnings. Meanwhile, across other asset classes, Treasury yields recovered after also sliding Monday. Oil markets ended the week with gains after plummeting sharply to start the week, too.

“If you had called me on Monday and said, ‘Are we going to be seeing new highs on Friday?’ I’d say there was a low probability,” said Keith Lerner, chief market strategist for Truist Advisory Services. “It just goes to show how quickly this market moves.”

The S&P 500 finished Friday up 44.31 points, or 1%, to close at 4411.79, notching a 2% gain for the week and its 40th record close for the year. The Dow Jones Industrial Average added 238.20 points, or 0.7%, to close at 35061.55, marking a 1.1% weekly gain. The climb past 35000 marked the index’s fastest 5,000-point gain to a new milestone, according to Dow Jones Market Data, taking only 165 trading days, including Friday, to climb from 30000.

The Nasdaq Composite, meanwhile, gained 152.39 points, or 1% Friday, to finish the week at 14836.99. The technology-heavy index rallied 2.8% for the week.

On a weekly basis, stay-at-home stocks and healthcare companies were among those to power the market higher, in a trading pattern that echoed the markets during the spring and summer of last year. Etsy gained 13% for the week, while Covid-19 vaccine-maker Moderna rallied 22%. Facebook and Twitter both gained roughly 8% or more for the week.

Behind the rally, money managers say, was another round of stellar earnings at American companies. Of the roughly 110 companies in the S&P 500 that had posted results through Thursday for the second quarter, 85% topped analysts’ profit forecasts, according to FactSet.

Money managers also say that governments in the U.S. and Europe are unlikely to implement lockdowns that restrict growth, even if rising cases take the shine off the economic recovery.


Video: Dow jumps 120 points to close just shy of 35,000 on earnings optimism (CNBC)

UP NEXT
UP NEXT

“You have an earnings season that is going tremendously well,” said Seema Shah, chief strategist at Principal Global Investors. The economic outlook isn’t as strong as it was three months ago, but “the path ahead is not that negative and certainly there is a lot of buying the dip,” she added.

Economic data released on Friday from IHS Markit showed that business activity in the U.S. private sector continued to expand in July, though the rate of growth eased. The purchasing managers index for the service sector showed that the rate of expansion softened, which firms attributed to labor and supply shortages. Service providers also indicated an uptick in cost burdens in July, according to the data.

Still, the data showed that the U.S. manufacturing purchasing managers index climbed to a record high. Behind the growth, according to the data, was a quicker rise in new orders, as new and existing customers ramped up their spending. Production also rose at a slightly quicker pace, the data showed.

Some money managers said this week that they expect choppiness in the markets in the months ahead, especially if more data continues to show that U.S. economic growth peaked this spring. Still, most expect that U.S. economy will keep recovering.

“More days like Monday are probably going to be happening from here on out,” said Ed Clissold, chief U.S. strategist for Ned Davis Research. Still, he added, the recovery that markets mounted shows that sentiment among investors remains elevated. “High optimism is still very much in the market.”

Among individual stocks, Snap jumped by $15 to $77.97, marking a 24% gain, after the company said its revenue that more than doubled in the second quarter and that user growth jumped the most in four years.

Twitter shares rose by $2.12, or about 3.1%, to $71.69 after the social-media company reported a 74% increase in revenue in the second quarter compared with a year before.

In contrast, Intel’s stock lost $2.96, or 5.3%, finishing at $53, after Chief Executive Pat Gelsinger said he sees the global semiconductor shortage potentially stretching into 2023.

TAL Education Group shares, listed in New York, plunged 71% on fears of a Chinese government crackdown on the for-profit education sector, and after-school tutoring in particular. An unverified document, circulating among investors and seen by The Wall Street Journal, appeared to be an official communication detailing tougher guidelines.

Other Chinese education companies also took a hit. American depositary receipts of Beijing-based 17 Education & Technology Group slumped 39%.

In the bond market, the yield on 10-year Treasury notes ticked up to 1.286% from 1.264% Thursday. Yields move in the opposite direction to bond prices. The yield on the benchmark note fell to 1.181% on Monday while stocks slid, marking its lowest yield since February.

In the oil market, Brent-crude futures, the international benchmark, gained 0.4% for the day, and 0.7% for the week, rising to $74.10 a barrel.

Overseas, the Stoxx Europe 600 rose 1.1%, bringing its weekly gains to 1.5%.

In Asia, Japan’s stock market was closed due to a national holiday. China’s Shanghai Composite fell 0.7% for the day, though it gained 0.3% for the week.

Write to Caitlin McCabe at caitlin.mccabe@wsj.com and Joe Wallace at Joe.Wallace@wsj.com

AdChoices
AdChoices
AdChoices

More from The Wall Street Journal

The Wall Street Journal.
The Wall Street Journal.
image beaconimage beaconimage beacon