The Dow Jones industrials advanced 0.4%, while the Nasdaq gained almost 0.2%, and the S&P 500 crawled 0.1% higher Friday. While all three indexes rallied, however, much of the market was bathed in red, with small caps tracked by the Russell 2000 dropping 1%, amid mixed volume.
Tech stocks have made some key moves this with, and the Nasdaq is headed for a 2.5% gain during its fourth straight weekly advance. The S&P 500, which notched a fresh all-time high earlier this week, is attempting to make a 0.5% increase, as the Dow leads the other two key indexes.
“I think the story with technology stocks is one based on fundamentals. These are companies with extremely strong revenue growth and very strong free cash flow as well. This was true before the pandemic. It has shown to be even further amplified by the pandemic with very strong earnings results from a lot of these tech companies in the second quarter. I think a catalyst for another leg higher for tech is honestly all of the cash we still have on the sidelines,” JPMorgan Asset Management global market strategist Gabriela Santos told Yahoo Finance’s The First Trade.
The major stock index ETFs are trading higher along with their underlying benchmarks Thursday. The SPDR Dow Jones Industrial Average ETF (DIA), and Invesco QQQ Trust (QQQ) are both showing marginal gains, while the SPDR S&P 500 ETF Trust (SPY) is struggling to remain positive.
The Covid-19 pandemic dampened enthusiasm for stocks overnight, as currently coronavirus has infected over 22.7 million people worldwide and resulted in at least 794,100 deaths in less than eight months, according to data compiled by Johns Hopkins University. There are at least 30 potential vaccines currently in clinical trials, according to the WHO, but there is no guarantee they will be safe and effective, he said.
“This is a temporary setback, as Covid-19 levels are still high but dropping, and re-openings continue, though at a slower pace given Covid-19’s surge in July,” Robert Frick, corporate economist at Navy Federal Credit Union, said in an email Thursday. “Though temporary, it underscores the economy is fighting in the trenches with Covid-19 now and Americans are losing jobs through secondary layoffs, bankruptcies and other factors that happen too quickly and too chaotically to accurately be accounted for week-to-week.”