Closing Stock Market SummaryThe S&P 500 rose 0.9% on Friday and ended the week with a 3.8% gain, as investors remained enthused by reported progress in stimulus talks and positive corporate commentary. The Nasdaq Composite outperformed with a 1.4% gain, followed by 0.6% gains in the Dow Jones Industrial Average (+0.6%) and Russell 2000 (+0.6%).
The White House was reportedly drafting a $1.8 trillion stimulus bill, up from a prior $1.6 trillion and representing an about-face from the previous stance aimed at standalone relief bills. President Trump advocated in a radio interview for a bigger stimulus package than what both sides are offering.
Truthfully, the reaction in the market wasn't that impressive considering the news contributed to only a small bump in the S&P 500, which was already trading higher before the headlines. That might have been because Senate Majority Leader McConnell said beforehand that a deal might not happen before the election or perhaps the market was gassed out after a strong week.
Sector leaders today included consumer discretionary (+1.5%) and information technology (+1.5%) amid solid gains in the mega-caps and semiconductor stocks. The Philadelphia Semiconductor Index rose 1.8%. The energy (-1.6%), real estate (-0.3%), and utilities (-0.04%) sectors closed lower.
Within the semiconductor space, Xilinx (XLNX 120.94, +14.95, +14.1%) was reported to be in talks to be acquired by AMD (AMD 83.10, -3.41, -3.9%) for $30 billion, NXP Semi (NXPI 141.53, +6.70, +5.0%) raised Q3 revenue guidance above consensus, and Teradyne (TER 86.10, +3.62, +4.4%) was upgraded to Buy from Hold at Stifel.
Separately, Gilead Sciences (GILD 63.84, +0.52, +0.8%) said trial data for its remdesivir drug shortened the recovery time of COVID-19 patients by five days and significantly reduced death rates. The news strengthened the market's optimism surrounding coronavirus treatments and their potential impact on consumer sentiment.
U.S. Treasured ended the session on a lower note. The 2-yr yield increased three basis points to 0.16%, and the 10-yr yield increased one basis points to 0.78%. The U.S. Dollar Index fell 0.6% to 93.06. WTI crude futures fell 1.3%, or $0.54, to $40.64/bbl.
Friday's economic data was limited to wholesale inventories for August, which increased 0.4% (consensus 1.0%) following a revised 0.2% decline in July (from -0.3%). Investors will not receive any notable data on Monday.
- Nasdaq Composite +29.1% YTD
- S&P 500 +7.6% YTD
- Dow Jones Industrial Average +0.2% YTD
- Russell 2000 -1.9% YTD