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S&P 500, Nasdaq Hit New Closing Highs; U.S. Jobless Claims Increase

Market watch – August 21, 2020

August 21, 2020

U.S. tech stocks turned in another powerful performance Monday, helping the Nasdaq to a record-high close, while the S&P 500 approached its own record. In Canada, the TSX rose 141 points, powered by a 5% jump in the materials sector, as gold stocks rallied.

It was another strong showing for the S&P 500 on Tuesday, as the index closed at its highest level ever. The S&P’s stunning turnaround, in just 126 trading days, marked the index’s fastest-ever recovery from a bear market. As of Tuesday, the S&P was up 5% for the year, while the Dow was still down more than 2% in 2020. One reason for the day’s optimism was a strong showing from the U.S. housing sector, with new construction hitting levels not seen in four years. By Tuesday’s close, the S&P and Nasdaq finished in positive territory, while the Dow and TSX retreated.

All four major N.A. markets lost ground on Wednesday, however, as the Fed released the minutes of its July meeting, which underscored the deep uncertainty regarding the U.S. economic recovery. The TSX finished down by nearly 50 points as declining gold prices weighed down the materials sector.

Hopes for a quick recovery waned even further Thursday as the number of new U.S. jobless claims increased by 135,00 to 1.1 million for the week ended August 15. Despite the jobs data, U.S. markets ended the day in positive territory, with the Nasdaq hitting another record high. In Canada, the TSX was up slightly, while the loonie declined against the greenback on Thursday after hitting a seven-month high on Wednesday.

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