Stock Market Today: Fed-Led Momentum Propels Dow Again
Fed's bond backing, Powell's suggestion for more Congressional spending and hints at an infrastructure plan lifted stocks broadly Tuesday
The maxim "don't fight the Fed!" rang true on Tuesday.
Positive momentum started yesterday by the Federal Reserve's bond-buying announcement continued after Fed Chair Jerome Powell told senators that "some form of support" would be "appropriate," implying that Congress should continue to provide financial help to ensure a recovery. A Bloomberg report saying the Trump administration was mulling a $1 trillion infrastructure package added to the optimism.
Health care was among the day's top sectors, with Dow components Merck (MRK, +4.0%) and UnitedHealth (UNH, +2.4%) helping to lead the industrial average 2.0% higher to 26,289, and the S&P 500 1.9% higher to 3,124.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Dow components Apple (AAPL, +2.7%) and Microsoft (MSFT, +2.5%) also propelled the Nasdaq (+1.8% to 9,895), as did Zoom Video Communications (ZM, +1.5%), which finished at yet another all-time high. The small-cap Russell 2000 finished 2.3% higher, to 1,452.
Can stocks go up forever? Of course not. But the government is proving an effective aid to investors right now. Thus, as long as the Fed and Congress appear willing to spend their way out of a recovery, it's impossible to rule out the idea of stocks grinding higher even in the face of worsening COVID-19 data in many parts of the country.
"Our view since the April FOMC meeting has been to follow the Fed because they print the money and are actually putting it to work," says Canaccord Genuity equity strategist Tony Dwyer. "We want to add risk as the consolidation plays out. Market swings have been at lightning speed and we believe many of the uncertainties that typically surround a crisis are on the path to recovery."
But be mindful of how you choose to try to ride the trend higher.
Airline stocks and retail stocks have the potential for outsized gains (because they're starting from more depressed levels), but government help can only do so much for these fields -- real recovery requires people to be more comfortable with leaving their homes.
Many technology stocks, however, are surviving and even thriving, and the sector offers a wealth of options. Hedge funds' most widely held blue chips are crowded at the top with tech names, but these 14 lesser-known plays offer considerable upside too. And don't discount the coronavirus effect, which should continue long after the COVID-19 threat subsides. Several tech stocks that enjoyed a lift during the early stages of the pandemic are still charging higher of late, including a few that have recently set new all-time highs.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Kyle Woodley is the Editor-in-Chief of WealthUp, a site dedicated to improving the personal finances and financial literacy of people of all ages. He also writes the weekly The Weekend Tea newsletter, which covers both news and analysis about spending, saving, investing, the economy and more.
Kyle was previously the Senior Investing Editor for Kiplinger.com, and the Managing Editor for InvestorPlace.com before that. His work has appeared in several outlets, including Yahoo! Finance, MSN Money, Barchart, The Globe & Mail and the Nasdaq. He also has appeared as a guest on Fox Business Network and Money Radio, among other shows and podcasts, and he has been quoted in several outlets, including MarketWatch, Vice and Univision. He is a proud graduate of The Ohio State University, where he earned a BA in journalism.
You can check out his thoughts on the markets (and more) at @KyleWoodley.
-
Visa Is the Worst Dow Stock Wednesday. Here's Why
Visa stock is down sharply Wednesday after the credit card company came up short of revenue expectations for its fiscal Q3.
By Joey Solitro Published
-
Another Analyst Moves to the Sidelines on Tesla Stock After Earnings
Tesla stock is spiraling Wednesday after the EV maker's big earnings miss and Wall Street has been quick to weigh in. Here's what you need to know.
By Joey Solitro Published
-
Stock Market Today: Stocks Tumble on Disappointing Big Tech Earnings
Poorly received quarterly results from Alphabet and Tesla sparked a steep selloff in equities.
By Dan Burrows Last updated
-
Stock Market Today: Mega-Cap Tech Rallies to Drag Markets Higher
Markets focused on upcoming earnings from Magnificent 7 stocks rather than chaos in D.C.
By Dan Burrows Published
-
Stock Market Today: Stocks Tumble After Spectacular Global Internet Crash
Market participants rushed out of risk assets to end a wild week of trading.
By Dan Burrows Published
-
Stock Market Today: Dow Sinks 533 Points as Big Banks, Mega Caps Slump
Goldman Sachs and Apple were two of the worst-performing blue chip stocks on Thursday.
By Karee Venema Published
-
Stock Market Today: Semis Get Slammed and Blue Chips Bounce
The potential for more curbs on tech sales to China set off a rotation into blue chips.
By Dan Burrows Published
-
Stock Market Today: Dow Spikes 742 Points After UnitedHealth Earnings
The S&P 500 and Nasdaq also scored wins Tuesday albeit with much smaller gains than the blue chip Dow.
By Karee Venema Published
-
Stock Market Today: Dow Adds 210 Points as Apple, Goldman Hit New Highs
A big rally in blue chips and some dovish Fed speak boosted the equities market Monday.
By Karee Venema Published
-
Stock Market Today: Markets Bounce Back on Rate-Cut Optimism
The latest readings on consumer sentiment and inflation helped lift the odds of the Fed easing in September.
By Dan Burrows Published