Weekly Stock Review: July 29-Aug 2
Bolstered by some good economic data, stock performance buoyed up in the month of July. The S&P 500 Index and the Dow Jones Industrial Average touched record heights.
Unexpected economic growth
Investors were in a celebratory mood from Wednesday after the Commerce Department announced that the economy was growing at unexpected pace of 1.7% in the second quarter. The news considerably eased prevailing fears of spending cuts and tax increases.
Labor market bounces back
News about the growing strength of the labor market also contributed to good performance of shares. While the government’s unemployment index saw a drop this week, payroll processing firm ADP declared that private job was rising at a convincing pace. It is also reported that factory activity touched new levels this week — the highest levels in two years. Economists polled by MarketWatch foresee that 190,000 jobs will be added in the months ahead while some even expect the figure to reach up to 225,000.
Other contributory factors included a major merger in the health care and new acquisition in the technology domain. Also, two-thirds of companies listed on the S&P 500 had met their second quarter estimates. All these helped to push up the Nasdaq Composite Index this week.
While worth of LinkedIn Corp. jumped almost 11% share, price of Dell Inc. rose by 5.6% after founder Michael Dell and Silver Lake entered into an agreement on change in voting rules. American International Group Inc. rose 2.7% beating Wall Street forecasts.