Stocks rise slightly as Wall Street tries to build on its best August since 1980s, Apple leads tech
The Dow Jones Industrial Average fell on Tuesday, the first trading day of the month, as the market took a breather following its best August performance since the 1980s.
The 30-stock average dropped 84 points, or 0.3%. The S&P hovered just above the flatline and the Nasdaq Composite outperformed with a 0.5% gain.
Apple led the gains in tech, rising about 2%. That gain came a day after the stock rose more than 3% following a stock split that appears to be causing investors to snap up the shares. Tesla rose slightly even after a regulatory filing revealed the company would sell up to $5 billion of its own stock.
Shares of Zoom Video jumped more than 30% after reporting another blowout quarter. The video conferencing company’s revenue more than quadrupled in the fiscal second quarter compared to a year ago.
The S&P 500 and the Dow just wrapped up their best August in more than 30 years. The blue-chip average rallied 7.6% in August for its fifth positive month in a row and its biggest August gain since 1984. The S&P 500 also rose for a fifth month straight, up 7%, clinching its best August since 1986.
The tech-heavy Nasdaq jumped 9.6% in August, posting its best monthly performance since 2000.
“While growth and momentum names continue to be the primary driver of returns, value and cyclicals have begun to participate,” Mark Hackett, Nationwide’s chief of investment research, said in a note on Monday.
Walmart shares gained 1% in premarket trading after it announced its Walmart+ membership program to compete with Amazon Prime.
Along with tech, reopening stocks — cruise line operators, airlines and hotels — had a big August. Royal Caribbean and MGM Resorts both gained about 40%, while FedEx and Gap jumped 30% each. Delta Air Lines and Norwegian Cruise Line were also among the S&P 500 leaders in August. Many of those shares were down slightly in Tuesday premarket trading.
The Dow’s composition changed on Monday with Apple’s 4-for-1 stock split taking effect. Salesforce, Amgen and Honeywell replaced longtime components Exxon Mobil, Pfizer and Raytheon Technologies.
Investors are awaiting a key monthly jobs report on Friday, which is forecast to show payrolls continued to rebound in August. Economists polled by Dow Jones forecast that 1.255 million jobs were created in August.
“With regard to US jobs, it’s important to keep in mind that the Fed’s new inflation target policy may impact how the market receives this news,” Kristina Hooper, Invesco’s chief global market strategist, said in a note.
“Normally, a good jobs report would spark concern that the Fed might tighten in order to proactively combat inflation and economic overheating. That concern has gone by the wayside, at least for now, with the Fed’s new policy,” Hooper said.
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