Stock Market Today: Home-Run Home-Sales Data Delights Wall Street

Stock Market Today: Home-Run Home-Sales Data Delights Wall Street

The market made a clean shot higher on Monday as investors' eyes yet again were diverted from COVID-19 data and toward encouraging economic figures.

The weekend saw continued growth in coronavirus cases across more than a dozen "hot spot" states, prompting governors to consider further actions to slow the spread. New Jersey announced it would not reopen indoor dining this week; New York appears to be considering following suit.

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Investors, however, appeared to focus on the real estate market. The National Association of Realtors said May's pending home sales, while off 5.1% year-over-year, surged 44.3% from April's figures – almost triple the improvement economists expected.

The Dow climbed 2.3% to 25,595, led by a massive 14.3% surge in Boeing (BA), which received a Federal Aviation Administration green light to begin test flights on its troubled 737 Max aircraft. The Nasdaq improved 1.2% to 9,874.15, the S&P 500 climbed 1.5% to 3,053, and the small-cap Russell 2000 stole the show with a 3.1% jump to 1,421.

Yet again, investors have plenty to chew on.

"The market is likely to remain in a period of consolidation marked by increased volatility as it digests the historic gains off the COVID-19 low, grapples with the impact of a re-acceleration in cases of coronavirus, anticipates the impact of the coming election, and works through a historic shutdown and reopening of economic activity," writes Canaccord Genuity equity strategist Tony Dwyer, who raised his S&P 500 target to above 3,300 over the next 12 to 18 months. "We have never had the combination of such low core inflation coupled with an unlimited support from the Fed, which is why we use a target of 3300+."

Shows of Strength Stand Out

No one should be surprised at Wall Street's response to economic data such as Monday's pending-home sales report. In the midst of extreme weakness, any displays of outsized strength are going to carry far more weight than under normal circumstances.

Income investors should take a cue here.

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Read more: https://www.kiplinger.com/investing/stocks/600998/stock-market-today-home-run-home-sales-data-delights-wall-street


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