S&P 500 On Pace For Fifth Straight Record Open

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August 28, 2020

The S&P 500 was set to open at a record high on Friday for the fifth straight session as the prospect of super-low interest rates for a prolonged period and bets on a medical solution to the COVID-19 pandemic spurred risk appetite.

The Federal Reserve on Thursday unveiled a plan to support inflation and restore the U.S. economy from its biggest downturn since the Great Depression.

Data on Friday showed U.S. consumer spending increased more than expected in July, though momentum is likely to ebb as the COVID-19 pandemic lingers and fiscal stimulus dries up.

“There’s no question consumer spending is going to be under some stress until we get additional fiscal support,” said Albert Brenner, director of asset allocation strategy at People’s United Advisors in Bridgeport, Connecticut.

U.S. lawmakers have remained deadlocked over a fifth coronavirus aid bill, with disagreements centered around extending extra jobless benefits amid soaring unemployment.

Still, the benchmark S&P 500 and the Nasdaq have scaled record highs, partly powered by a rally in technology stocks, while the blue-chip Dow briefly turned positive on the year on Thursday.

“We’d like to see a sort of a broadening of (stocks in the rally); that would indicate to us some greater confidence of market participants in the economic recovery,” Brenner said.

Progress in the race to develop treatments and vaccines for COVID-19 have also added to the cheer. Johnson & Johnson’s Janssen unit said it would expand testing for its experimental coronavirus vaccine to Spain, the Netherlands and Germany next week.

Meanwhile, the U.S. election campaign entered its final stretch with U.S. President Donald Trump’s Republican nomination for a second term. Analysts expect market volatility to increase again ahead of voting in November.

At 8:59 a.m. ET, Dow e-minis were up 106 points, or 0.37%, S&P 500 e-minis were up 7.5 points, or 0.22% and Nasdaq 100 e-minis were up 8 points, or 0.07%.

United Airlines edged up 3.3% in premarket trading as it prepared for the biggest pilot furloughs of its history a day after announcing the need to cut 21% jobs this year without further U.S. government aid.

Coca-Cola Co gained 1.2% as announced plans to nearly halve its operating units and offer voluntary separation to 4,000 workers, as the beverage maker battles a hit to sales from the COVID-19 pandemic.

In the latest sign that technology companies are booming in the pandemic, business software provider Workday Inc jumped 9.9% after raising its annual subscription forecast.

Dell Technologies Inc gained 3.9% after reporting quarterly profit that beat expectations as remote working and online learning boosted demand for its notebooks and software products.

Cosmetics retailer Ulta Beauty Inc jumped 13.2% after posting quarterly profit ahead of market expectations.

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Shares of Tesla Inc and Apple Inc rose 2.8% and 0.6% ahead of their stock splits that take effect on Monday.

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

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S&P 500 On Pace For Fifth Straight Record Open

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