Day Traders Diary

7/1/21

The major averages are higher to start the third quarter and the second half of the year as the S&P 500 is set to hit another record high.

The benchmark index is up 0.4% on track for its sixth-straight record close. The Dow Jones Industrial Average is higher by over 100 points, while the tech-heavy Nasdaq Composite is up 20 points.

The rise for stocks was widespread, with energy stocks leading the way as West Texas Intermediate crude rose above $75 per barrel. Shares of Chevron rose 1.4%, making the stock one of the best performers in the Dow.

Apparel company Nike was another winner, rising nearly 2%. However, shares of Walgreen Boots Alliance fell more than 5% despite releasing a better-than-expected earnings report, weighing on the 30-stock average.

A stretch of strong economic news continued on Thursday as weekly initial jobless claims came in at 364,000, setting a pandemic-era low. Economists polled by Dow Jones are expecting initial claims for unemployment totaled 390,000 last week, after totaling 415,000 for the week ended June 19.

Additionally, the Institute for Supply Management's June manufacturing index showed an expansion that was roughly in line with expectations, and the Congressional Budget Office hiked its estimates for economic growth.

Thursday's moves came after the major averages closed out a strong first half of 2021 and second quarter on Wednesday.

For the year, the Dow is up 12.7%, hovering about 1.7% below its all-time high. The S&P 500 rallied 14.4% in the first half of 2021 and the technology-heavy Nasdaq Composite rose 12.5%. The S&P 500 notched its fifth positive month in a row, rising 2.2% in June.

The small cap Russell 2000 rose more than 17% in the first six months of the year amid a strong rotation into value stocks as the economy reopens from the Covid-19 pandemic. However, smaller companies and value stocks appeared to lose momentum in recent weeks while Big Tech stocks regained their footing.