Stock Market Today: Apple Sprouts Wings, Stocks Rally Into the Weekend

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Rosier economic data lifted the broader markets Friday, but much of the day's progress can be credited, once again, to Apple (AAPL) and a handful of other large tech winners.

The National Association of Realtors reported a second consecutive record monthly increase in existing-home sales – a 24.7% jump from June to a seasonally adjusted annual rate of 5.86 million in July, which could keep housing market stocks booming. Also, IHS Markit's flash readings for American manufacturing and services were both up in July; scores of 53.6 and 54.8, respectively, signal improving environments for both.

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But while the S&P 500 gained 0.3% to a record-high 3,397, more than half of its components were lower for the day.

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Helping lead the charge was Apple (+5.2%), which now accounts for nearly 7% of the S&P 500, as the index is weighted by market value. Apple exceeded $2 trillion by that measure on Thursday and pushed farther ahead Friday, closing at a value of $2.13 trillion just days before it's set to split its stock 4-for-1.

However, CFRA analyst Angelo Zino, who has a Buy call on AAPL and raised his 12-month price target from $460 per share to $502, says he's looking past the stock split.

"We are turning our attention to AAPL's all-important event in September, which will lay out the company's new hardware devices (e.g. phones and wearables)/business prospects for the next year," he writes. "We think the possibility of AAPL beginning to bundle different Services (e.g. Music and TV+), which could be announced next month, would be a bigger catalyst and support recent multiple expansion to the shares."

Chipmaker Nvidia (NVDA, +4.5%), which reported blowout earnings Wednesday, also surged. The catalyst: Jefferies analyst Mark Lipacis raised his price target on shares to $570 and compared it to Apple for its potential to dominate.

"We think the company will continue to surprise on the upside, and wouldn't be surprised to see NVDA undertake more M&A to build out its data center system capabilities," Lipacis says.

The Dow Jones Industrial Average also finished in the black Friday, up 0.7% to 27,930, and the Nasdaq Composite continued to set new all-time highs with a 0.4% gain to 11,311. The small-cap Russell 2000, however, declined 0.8% to 1,552.

The Gap Between Stocks and the Economy

Many market observers have noted the clear discrepancy between the stock market's strength and the American economy's sluggish recovery.

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So, when will the U.S. economy catch up?

A large number of high-profile retailers set to report earnings next week might provide a little illumination. A UBS Research Big Data dive provides some insight, too – specifically, it suggests a "significantly slower August recovery."

"The high-frequency data that together suggest this slowing pace of recovery include steady but slow improvement in steel production, little recovery in rig counts, trucking diesel production steadying below pre-Covid levels, steady rail traffic and containerized import orders, and others," writes UBS Strategist Ajit Agrawal. "Retail spending has normalized in official data, though remains below normal in ours. Our data suggests there has been little improvement in retail spending over the past 9 weeks."

There are plenty of things to learn about bull markets, and one of them is that while the economy and stocks are connected, they're not handcuffed to one another. Investing in a bull market in the midst of a recession certainly requires a little threading of the needle.

The top stock picks for a market like this need, among other things, to have recession-resistant characteristics and/or have businesses that are uniquely tailored for today's challenges, including continued social distancing … but also must be in a position to benefit if economic activity does return to normalcy. Here, we look at 20 such stocks.

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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.