Another Week, Another Gain for Stocks

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The U.S. bull market’s winning run continued last week as the S&P 500 broke out to new highs.

The index rose 0.9 percent between Friday, August 24, and Friday, August 31 — its eighth gain in the last nine weeks. The benchmark also advanced 3 percent in August, its fifth straight positive month. Large, high-profile technology stocks led the charge.

Apple (AAPL), for instance, continued its advance as investors await new iPhones on September 12. Amazon.com (AMZN) passed $2,000 for the first time on a strident analyst call. Biotechnology stocks also came to life ahead of some investor conferences.

The news flow remained positive for market bulls. Second-quarter gross domestic product was unexpectedly revised higher thanks to a surge in business investment. Consumer confidence rose more than forecast to an 18-year high. Trade uncertainties continued, but investors have grown less worried about those.

S&P 500 index with moving averages.

It was also a good week for oil, which shot to its highest level in almost two months on signs of tightening supply. Meanwhile, save-haven utility and consumer-staple stocks pushed lower.

Retail earnings continued to flow. Investors stuck with the same pattern of embracing digital-transformation stories like Lululemon (LULU) and punishing brick-and-mortar dinosaurs like Dollar Tree (DLTR).

Speaking of DLTR, it was the worst-performing member of the S&P 500 last week. The discounter cratered 14 percent after profit, revenue and guidance missed consensus. Electronic Arts (EA) followed with a 12 percent drop on news its Battlefield V game would be delayed.

Biotechnology stock Regeneron (REGN) led to the upside, climbing 8 percent despite an apparent lack of bullish news. PG&E (PCG) and Ulta Salon (ULTA) were close behind.

The current week is shortened by Labor Day but still features some important events. (Check out biotech story for information on industry conferences.)

Today’s main item is the Institute for Supply Management’s manufacturing index.

Tomorrow, top executives of Facebook (FB), Alphabet (GOOGL) and Twitter (TWTR) will testify on Capitol Hill.

Thursday brings ADP’s private-sector payrolls report, initial jobless claims and crude-oil inventories.

The week concludes with non-farm payrolls on Friday morning.

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David Russell is VP of Content Strategy at TradeStation. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.