S&P 500, Nasdaq close at record highs on trade, vaccine developments
Reuters
Published Aug 25, 2020 06:22AM ET
Updated Aug 25, 2020 04:10PM ET
By Stephen Culp
NEW YORK (Reuters) - The S&P 500 and the Nasdaq hit all-time closing highs on Tuesday, but a drop in Apple stock capped gains from positive developments in U.S.-China trade and fresh progress in the medical battle against the coronavirus pandemic.
The Dow, which has yet to reclaim its February high, ended the session lower.
Apple Inc (NASDAQ:AAPL) weighed heaviest on all three indexes, its stock retreating days ahead of its 4-to-1 stock split.
That split, which will reduce Apple's weight in the Dow, prompted a reshuffle in the blue-chip industrial average, with Salesforce.com (NYSE:CRM) replacing Exxon Mobil Corp (NYSE:XOM), Amgen Inc (NASDAQ:AMGN) taking Pfizer Inc (NYSE:PFE)'s spot, and Raytheon Technologies (NYSE:RTX) Corp ousted by Honeywell International Inc (NYSE:HON).
"These changes reflect what has occurred in the overall business environment," said Robert Pavlik, chief investment strategist at SlateStone Wealth LLC in New York.
"But if (the Dow) were a portfolio drafted by a portfolio manager, the client would have fired the portfolio manager," Pavlik added.
Trade officials in Washington and Beijing reaffirmed their commitment to Phase One of a bilateral trade deal, but goodwill between the countries soured as China called a U.S. spy plane's flight through a no-fly zone a "naked provocation."
British drugmaker AstraZeneca (NYSE:AZN) has begun trials of its antibody-based drug for the treatment and prevention of COVID-19, the latest development in a global race to combat the pandemic.
Later in the week the Kansas City Fed will convene its virtual Jackson Hole Economic Policy Symposium, with U.S. Federal Reserve Chairman Jerome Powell expected to speak.
On the economics front, the Conference Board's Consumer Confidence index plunged to a 6-year low this month, while a report from the Commerce Department showed sales of new homes in July surged to a more than 13-1/2-year high.
"You have this dichotomy between what's happening in the stock market and the economy," Pavlik said. "They're moving away from each other."
"Wall Street believes in a year from now the economy is going to improve and it's positioning itself to what it anticipates six months to a year from now."
Unofficially, the Dow Jones Industrial Average fell 59.71 points, or 0.21%, to 28,248.75, the S&P 500 gained 12.39 points, or 0.36%, to 3,443.67 and the Nasdaq Composite added 86.75 points, or 0.76%, to 11,466.47.
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Of the major sectors in the S&P 500, communications services enjoyed the largest percentage gain, with energy falling the most.
Shares of American Airlines (NASDAQ:AAL) Group Inc dropped after announcing it would layoff 19,000 employees in October unless the government extends airline payroll aid.
Electronics chain Best Buy Inc beat analysts' second-quarter sales expectations but warned of a current quarter slowdown following the work-from-home demand surge.
Medtronic (NYSE:MDT)'s stock advanced after the medical device maker's quarterly profit beat consensus. The company said a revival in elective surgeries was boosting demand.
Written By: Reuters
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