All three major indexes were eyeing weekly wins
Major benchmarks kicked off the month of August this week, and with it came bouts of volatility. After spending most of the day higher on Monday, stocks turned lower in the last hour of trading, with the Dow erasing an intraday high to finish in the red. A surge in Covid-19 infections, spurred by the delta variant, was to blame for the dip. Traders were able to shake off those fears on Tuesday, though, as bank and industrials stocks helped the broader market recover. The Dow notched its best single-session gain since July 21, while the S&P 500 nabbed a record close.
Stocks fell just as quickly as they rose, however. On Wednesday, The Dow erased all of the previous session's gains to log its worst single-session fall since July 19. Weighing on sentiment was the ADP private payroll survey, as well as Fed comments that interest rate hikes could resume by 2023. Keeping with this volatility theme, that trough did not last very long, as energy and travel stocks pushed the S&P 500 and Nasdaq to record closes ahead of a pivotal jobs report. The U.S. Labor Department reported on Friday 943,000 jobs were added in July, as opposed to the 845,000 jobs analysts expected, while the unemployment rate fell to 5.4%. This pushed the Dow and S&P 500 to new intraday highs, though the Nasdaq faltered. Despite a rollercoaster week, all three benchmarks were eyeing weekly wins.
Tech Names that Made Moves This Week
The tech industry was in focus this week. For one, Square (SQ) popped after acquiring Afterpay for $29 billion in an all-stock deal. Investors were also keeping an eye on Apple (AAPL), which is the best FAANG name to own in August. Online sports gambling name Draftkings (DKNG) was eyeing a key trendline ahead of earnings, while Roku (ROKU) plunged after the streaming device giant reported weak user growth and tight margins.
Another tech name that plummeted this week was Fastly (FSLY). Analysts slammed the software stock with bear notes after a quarterly earnings and revenue miss. On the other hand, Zoom Video Communications (ZM) was set to blow past a technical ceiling. Also making headlines this week was Advanced Micro Devices (AMD), after the chip concern notched five-consecutive record closes.
All Eyes on Big Pharma
Drug makers gave investors plenty of updates to sift through, too. Options bulls piled on Vaxart (VXRT) after the U.S. Food and Drug Administration (FDA) cleared the way for it to start clinical trials on its oral Covid-19 vaccine. Conversely, Novavax (NVAX) said it would not seek emergency use authorization for its vaccine in the U.S. until the fourth quarter. Eli Lilly (LLY) hit a fresh record, brushing off an earnings miss after reporting weaker demand for its coronavirus therapy.
Meanwhile, blue-chip name Walgreens Boots Alliance (WBA) stood out among one of the worst stocks to own in the pharmaceutical sector this month. Amgen (AMGN) was not looking so hot either, after it lowered its full-year net earnings guidance due to the pandemic. Finally, Amedisys (AMED) was hoping for a post-earnings pop ahead of Wednesday's quarterly report.
Looking Ahead to the Second Week of August
The second week of August brings more quarterly reports and a slew of economic indicators, though the earnings season is finally starting to wind down. The biggest names to enter the earnings confessional include 3D Systems (DDD), Airbnb (ABNB), BioNTech (BNTX), Chegg (CHGG), Coinbase Global (COIN), eBay (EBAY), Nio (NIO), and Walt Disney (DIS). Plus, job openings, productivity, and unit labor data are all due out, in addition to the producer and core consumer price indexes, as well as the latest round of jobless claims. Until then, find out which millennium levels to watch on the Dow, and get a sense of where investor sentiment currently stands.