Stocks advance on tech rally, stimulus talks

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“With the impact of past stimulus measures fading and given some evidence that the global recovery has already stalled, it remains to be seen what will help keep global stock markets elevated in the coming months, especially U.S. stocks,” said Fawad Razaqzada, a market analyst at ThinkMarkets. “There is a risk we may see a correction in August, although it doesn’t have to be as severe as the one we saw in March, for things have since improved and monetary conditions are even more accommodative.”

Tech companies continued to lead the advance in 2020, and their results are a validation for bulls who have bet the industry would emerge from the pandemic stronger than the rest of the market. Since the bottom in March, the Nasdaq 100 has added about $4 trillion in market value. It’s beat the benchmark gauge for a 10th straight month — the longest winning streak in 20 years.

Despite the tech resilience, Michael Sheldon, chief investment officer at RDM Financial Group, said it’s very possible the market could enter a trading range over the next month or two because there’s still a lot of uncertainty.

“If you look ahead 12 to 18 months, the economy is likely to continue to recover from the deep downturn caused by COVID-19,” he said. “However, it’s important for investors to know that the recovery in the economy is not likely to be in a straight line. There will likely be bumps around the way.”

Some other corporate highlights:

  • Exxon Mobil Corp. and Chevron Corp. posted the worst losses in a generation after the pandemic and a global crude glut combined to batter almost every part of their businesses.
  • Caterpillar Inc.’s cost cuts helped it make up for slowing sales, but concern of second waves of the coronavirus weighed on the prospects for the rest of the year.
  • Gilead Sciences Inc.’s “remdesivir guidance is hard to believe,” a Raymond James analyst said after the biotech company raised its forecast.
  • Pinterest Inc. said revenue in July jumped as advertisers and users returned to the social-sharing service.