Stocks ended the session in positive territory on Tuesday and the Nasdaq closed higher despite a shockingly weak economic data while closely watching on oil prices.
The Dow Jones industrial average (DJIA) rallied by 45 points in late trade, led by advancing shares of Chevron and Boeing.
"I think we're in a lull," managing director at KKM Financial Daniel Deming said. "I think the market is still digesting last week's numbers ... and there's just not a catalyst right now."
In essence, investors were in fact, digesting Friday’s August jobs data that gives optimism for traders to hope that the Federal Reserve will leave interest rates unchanged.
Meanwhile, the DJIA was broadly higher by 0.3% at the close in a holiday-shortened trading week, along with the Standard & Poor’s 500 stock index, while the technology-dominated Nasdaq composite rallied by about 0.5% and hit a fresh highs at 5275.91, marking a previous reading of 5262.05 on August 15.
Stocks After U.S. Labor Day Holiday
Given a weak economic data on Tuesday, Bayer has raised its bid for Monsanto to $127.50 per share from $125, while Danaher bought the molecular diagnostic company Cepheid for $53 per share.
It appears that the U.S. first trading day of the week was Tuesday, after the U.S. Labor Day holiday.
"I'm impressed by the stock market's resilience. I would've expected a more negative reaction," an investment strategist at Edward Jones Kate Warne said. "I think the reason the market is being resilient is because [ISM] lowers the expectations that the Fed will make any sudden moves."
Current State of Nasdaq
The chart below illustrates the NSDQ response during the previous U.S. labor day holiday, along with a higher price despite a weak economic data, in which the stock price showed a significant uptrend and reached an all-time closing high at 4836.25.
Further, the candlestick attempted a slight break out on the upper line of the indicator at the same time touched the second line on August 6 with a trading volume of 1,777,940,000, which suggests another rally in today’s session at resistance 4837.34 and support 4679.41.
As the Federal Reserve seemed to leave interest rates on hold until December, along with the third quarter earnings report in over five weeks away, we conclude that Wall Street will closely watch on the presidential campaign and the soon-to-be-announced economic data.
Thus, it is anticipated that it will give further signals on the stance of the U.S. economy and sees a 2.5% growth in the second half of the year, citing a 1% growth in the first six months of the year.
In addition, Wall Street is also expected to focus on Volkswagen’s decision to cover worth $256 million stake in Navistar International to initiate an exposure in the U.S. market, which includes technology sharing, joint purchasing and cost savings.
Get market insights and updates and subscribe to our daily newsletter! FSM News provides accurate market knowledge and information.