The broader markets scored marginal gains Wednesday as several potential headwinds swirled but failed to fully crack investor optimism.
U.S.-China tensions are ratcheting up again, for one. China's Foreign Ministry decried an "unprecedented escalation" Wednesday, claiming the U.S. ordered it to shut its Houston consulate – a day after the Department of Justice charged two Chinese hackers with probing American companies for coronavirus research and stealing trade secrets.
Also, Congress continues to stumble toward a new stimulus deal, and the $600-per-week extra unemployment benefit is just days away from expiring. (Several afternoon reports say Republicans are considering extending the jobless bonus, but at a much-reduced rate of $100 per week.)
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free 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.
The Dow Jones Industrial Average finished up just 0.6% to 27,005, the S&P 500 closed 0.6% higher to 3,276, the Nasdaq Composite eked out a 0.2% gain to 10,706, and the small-cap Russell 2000 improved by 0.2% to 1,490.
But a few individual stocks generated a little more movement:
- Industrial average component Pfizer (PFE, +5.1%) jumped after landing a nearly $2 billion order from the U.S. government for 100 million doses of its experimental COVID-19 vaccine.
- Social media platform Snap (SNAP, -6.2%) dipped after reporting disappointing user growth and swelling losses.
- Slack Technologies (WORK, -5.1%) fell after it accused Microsoft (MSFT, +1.4%) of anticompetitive behavior in Europe.
- And Tesla (TSLA) was surging more than 6% in early after-hours trading after reporting an adjusted $2.18-per-share profit that hammered expectations of 3 cents per share. The electric vehicle (EV) stock also said it earned $104 million on a GAAP (generally accepted accounting principles) basis, marking its fourth consecutive net profit.
Don't Completely Ignore Defense
As volatility continues and potential hurdles mount, some investors might want to fortify their defenses. That seemed to be the case Wednesday, as utility stocks (+1.5%) were among the few sectors demonstrating any real direction.
And don't forget about bonds, either, which have run up considerably in 2020 – in part thanks to the Federal Reserve.
"The Fed announced its Secondary Market Corporate Credit Facility (SMCCF) on March 23, and the SMCCF has capacity to purchase up to $250 billion in mainly IG corporate bond assets, via buying of individual securities and exchange-traded funds (ETFs)," writes Peter Wilson, Global Fixed Income Strategist at Wells Fargo Investment Institute. "As of June 30, the facility had purchased $9.6 billion, almost $8 billion in ETFs and $1.6 billion in individual bonds.
"To put this into perspective, the total assets of the largest U.S. IG corporate ETF have doubled since March 19 this year, reaching $56.5 billion as of July 14, so it is clear to us that private-sector purchases have swamped the Fed’s own buying."
For those who don't wander into the fixed-income markets much, we suggest brushing up on bond basics first.
Once you're a little more acclimated, you have a wealth of options to choose from. For instance, municipal bond funds allow you to generate yields that are heavily shielded from the tax man.
But there are plenty of other bond strategies – from short-term Treasuries to corporate bonds and more. If you want to seek out protection in the debt markets, read on as we introduce you to a dozen ETFs and mutual funds that put literally thousands of bonds to work for you.
Kyle Woodley was long WORK as of this writing.
-
The New Travel Trend For Your Next Trip"Noctourism" is a new trend of building travel and vacations around events and plans that take place at night. Take a look at some inspiring noctourism ideas.
-
With Buffett Retiring, Should You Invest in a Berkshire Copycat?Warren Buffett will step down at the end of this year. Should you explore one of a handful of Berkshire Hathaway clones or copycat funds?
-
S&P 500 Sees New Highs on Shutdown Day: Stock Market TodayMost of its components were in the red, but the S&P 500 Index still managed to hit a new intraday all-time high.
-
If You'd Put $1,000 Into Bank of America Stock 20 Years Ago, Here's What You'd Have TodayBank of America stock has been a massive buy-and-hold bust.
-
If You'd Put $1,000 Into Oracle Stock 20 Years Ago, Here's What You'd Have TodayORCL Oracle stock has been an outstanding buy-and-hold bet for decades.
-
How to Invest for Rising Data Integrity RiskAmid a broad assault on venerable institutions, President Trump has targeted agencies responsible for data critical to markets. How should investors respond?
-
Stocks Rise to Start Fed Week: Stock Market TodayThe Nasdaq Composite and S&P 500 hit new record closing highs as Wall Street awaits the Fed's next rate cut.
-
Markets Prepare for August Inflation Data: Stock Market TodayApple CEO Tim Cook is still important, but price action this week is as much about incoming inflation data ahead of next week's Fed meeting.
-
Stocks Slip as Job Growth Stalls: Stock Market TodayThe August jobs report came in much weaker than expected, while the unemployment rate ticked higher.
-
If You'd Put $1,000 Into Sherwin-Williams Stock 20 Years Ago, Here's What You'd Have TodaySherwin-Williams stock has clobbered the broader market by a wide margin for a long time.
