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Real Estate Helps S&P Edge Higher, Energy Lags

Weekly Update – October 02, 2020

  • The S&P 500 index rose 1.5% last week, the benchmark’s first weekly advance since August, as the real estate sector, financials and utilities led a broad climb.
  • The S&P 500 ended the week at 3,348.44, up from last Friday’s close of 3,298.46.
  • Wednesday, the index closed out the month of September with a 3.9% drop but was still up 8.5% for the third quarter.
  • October and Q4 appeared to start on a positive note Thursday, with the S&P 500 gaining 0.5% in that day’s session. However, President Donald Trump and First Lady Melania Trump announced early Friday that they tested positive for COVID-19.
  • The development added a new level of uncertainty for the market at a time when investors were already uneasy about how the rest of the pandemic, as well as the presidential election, will play out. The S&P 500 fell 1.0% in Friday’s session, wiping out Thursday’s gain.
  • The real estate sector had the largest increase of the week, up 5.1%, followed by gains of 3.4% and 3.5% in utilities and financials, respectively. Just one sector was in the red for the week: energy, which shed 2.9%.
  • Prologis (PLD) was among the week’s gainers in real estate as Goldman Sachs reinstated its investment rating on the stock at buy with a price target of $126. The shares rose 6.7%.
  • In the utilities sector, shares of Duke Energy (DUK) climbed 11% this week amid a report the company may still be open to further talks after rejecting a recent takeover approach from NextEra Energy (NEE).
  • In financials, Charles Schwab (SCHW) shares rose 7.8% this week as filings said the company expects to close its proposed acquisition of TD Ameritrade on Oct. 6.
  • On the downside, the energy sector’s drop came as crude oil futures also fell this week. The decliners included Chevron (CVX), down 0.9%, and Exxon Mobil (XOM), down 4.8%.
  • Next week, the market will get readings on service-sector business activity Monday, the trade deficit Tuesday, consumer credit Wednesday and wholesale inventories Friday. Minutes from the latest Federal Open Market Committee meeting will also be released Wednesday.
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