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Dow Closes Low, But Notches Best August Since 1984

Published 08/31/2020, 03:53 PM
Updated 08/31/2020, 04:05 PM
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By Yasin Ebrahim

Investing.com – The Dow closed lower Monday as energy and industrials fell, but handsome gains through the month saw the index notch its best August performance since 1984. 

The Dow Jones Industrial Average fell 0.78%, or 223 points, though it had been down 290 points at the lows of the day. The S&P 500 was down 0.25, while the Nasdaq Composite gained 0.68% to close at another record high.

Energy stocks led the move lower in the Dow as oil prices struggled in the wake of data showing U.S. crude production rose 4.2% to 10.436 million barrels per day in June, renewing oversupply concerns.

 
Fear about supply outstripping demand come as the impact of the coronavirus has hurt travel and tourism activity.

But Goldman Sachs (NYSE:GS) lifted its forecasts on Brent crude for the second-quarter of next year to $57.50 a barrel from $52 barrel previously amid expectations that vaccines will support global growth.

Industrials were also under fire in the wake of a plunge in airlines on concerns a price war could be brewing in the industry. 
 
American Airlines (NASDAQ:AAL) fell nearly 4% after scrapping its $200 fee to change a domestic ticket in the wake of a similar move by rivals. United Airlines (NASDAQ:UAL) and Delta Air Lines (NYSE:DAL) closed more than 3% lower. 
 
Losses in the broader market were kept in check by ongoing strength in Apple (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA), both of which saw their stocks splits take effect today.

Apple's stock split drew favorable commentary from multiple analysts on Wall Street ahead of the tech giant's iPhone 12 launch.  

"With Apple's 4:1 stock split effective this morning we are adjusting our price target to $150 and bull case to $175 accordingly. With Apple's stock split this morning it speaks to Cook & Co. in a major position of strength with clear tailwinds heading into its iPhone 12 supercycle kicking off in early October," Wedbush said in a note.

Microsoft (NASDAQ:MSFT), meanwhile, fell 1.5% as concerns that China could slow or scupper its deal to buy TikTok overshadowed a CNBC report suggesting the deal could be wrapped up as soon as Tuesday.
 
In consumer discretionary, Amazon.com (NASDAQ:AMZN) was up 1.45% after the e-commerce giant received regulatory approval to operate its fleet of drones for air delivery service.

On the monetary policy front, Federal Reserve vice chairman Richard Clarida strengthened expectations that monetary policy will remain accommodative for a prolonged period, insisting that under the Fed's new approach to inflation, a low unemployment rate by itself is unlikely to be a sufficient trigger for policy action.

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