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Dow Climbs as Energy Steps Up, Tech Pares Losses

imageStock Markets4 hours ago (Aug 10, 2020 02:59PM ET)

(C) Reuters.

By Yasin Ebrahim

Investing.com – The Dow advanced Monday led by energy amid a jump in oil prices, though investor sentiment was kept in check by rising U.S.-China tensions and worries over the slow progress on the next fiscal stimulus package that is needed to keep the economic recovery on a solid footing.

The Dow Jones Industrial Average rose 1.26%, or 346 points. The S&P 500 gained 0.29%, while the Nasdaq Composite jumped fell 0.34%.

Energy led the broader market higher on rising oil prices following better-than-expected Chinese economic data and positive comments on the outlook for energy demand from Saudi Aramco (SE:2222).

Aramco chief executive Amin Nasser said on Sunday that global oil demand would continue its recovery as lockdown measures ease. China’s gasoline and diesel demand are “almost at pre-COVID 19 levels,” Nasser added. “As countries ease the lockdown, we expect the demand to increase.”

Industrials are also joining in on the upside as data showing air travel over the weekend rose to the highest volume in nearly five months.

American Airlines (NASDAQ:AAL), United Airlines (NASDAQ:UAL) and Delta Air Lines (NYSE:DAL) rose more than 7%.

On the stimulus front, Treasury Secretary Steven Mnuchin attempted to ease worries, insisting that he expects lawmakers to agree on a deal by the end of the week.

Failure by Congress to agree a deal on the next wave of the fiscal stimulus could hurt the economy’s path to recovery.

“The U.S. economy is on a path that is about to fork. One way sees a faster recovery with new federal support. The other leads to a double-dip recession and a lagged recovery as households struggle, ” Grant Thornton Chief Economist Diane Swonk said.

President Donald Trump’s efforts to plug the financial stimulus gap by issuing executive orders to extend unemployment benefits – at a reduced amount of $400, down from $600 a week – did little to ease worries.

Tech, meanwhile, pared losses, though remained pressured as rising U.S-China tensions have sparked uncertainty in the sector following Washington’s threat against Chinese tech companies last week.

Apple (NASDAQ:AAPL), however, helped cushion the downside in tech, rising more than 1% after Wedbush lifted its price target on the stock to $515 from $475, citing expectations that the upcoming launch of the iPhone 12 will spark a jump in upgrades.

Amazon.com (NASDAQ:AMZN), down nearly 1%, was also in the spotlight on reports that the e-commerce giant was in talks with U.S. shopping mall owner Simon Property (NYSE:SPG) to covert JCPenney and Sears department stores into fulfillment centers.

Among consumer discretionary companies, Foot Locker (NYSE:FL) reported an 18% rise in same-store sales and earnings in the fiscal second quarter that beat Wall Street estimate, sending its shares more 8% higher. Foot Locker is slated to report full-quarterly earnings on Aug. 21.

In other news, Eastman Kodak (NYSE:KODK) slumped 26% as its $765 million loan from the federal government was placed on hold amid allegations of insider trading.

Dow Climbs as Energy Steps Up, Tech Pares Losses

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