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Nasdaq ends at three-month high as PayPal fuels optimism

By Reuters_News

20:12, 3 August 2022

A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., June 7, 2022.
A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., June 7, 2022.

By Noel Randewich

- Wall Street ended sharply higher on Wednesday, with strong profit forecasts from PayPal and CVS Health Corp lifting sentiment and helping elevate the Nasdaq to its highest level since early May.

Data showed the U.S. services industry unexpectedly picked up in July amid strong order growth, while supply bottlenecks and price pressures eased. That supported views that the economy was not in recession despite output slumping in the first half of the year.

A fresh batch of strong results from companies including PayPal PYPL.O and CVS Health Corp boosted sentiment in a largely upbeat quarterly reporting season. Reports exceeding low expectations have helped Wall Street rebound from losses caused by worries about decades-high inflation, rising interest rates and shrinking economic output.

"We're going through Q2 earnings and, by and large, from the tech complex to consumer discretionary and industrials, we're seeing a lot of better-than-feared prints, and that's just good enough right now," said Sahak Manuelian, managing director of trading at Wedbush Securities in Los Angeles.

Apple AAPL.O and Amazon AMZN.O rallied almost 4%, while Facebook-owner Meta Platforms META.O jumped 5.4%.

PayPal soared almost 10% after it raised its annual profit guidance and said activist investor Elliott Management had an over $2 billion stake in the financial technology firm.

CVS Health gained 6.3% after the largest U.S. pharmacy chain raised its annual profit forecast after posting strong quarterly results.

Manuelian said an additional factor behind Wednesday's stock rally was growing confidence among investors that the Fed has already carried out the bulk of the interest rate hikes that will be necessary to bring inflation under control.

Meanwhile, Richmond Federal Reserve President Thomas Barkin on Wednesday joined policymakers saying that the U.S. central bank is committed to getting inflation under control and returning it to its 2% target.

The S&P 500 climbed 1.56% to end the session at 4,155.12 points.

US100

18,249.40 Price
-0.200% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 21:00 (UTC)
Spread 7.0

Gold

2,233.43 Price
+1.740% 1D Chg, %
Long position overnight fee -0.0188%
Short position overnight fee 0.0106%
Overnight fee time 21:00 (UTC)
Spread 0.80

ETH/USD

3,572.24 Price
+0.210% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

XRP/USD

0.62 Price
-1.660% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

The Nasdaq gained 2.59% to 12,668.16 points, while Dow Jones Industrial Average rose 1.29% to 32,812.50 points.

Additional data on Wednesday showed new orders for U.S.-manufactured goods increased solidly in June and business spending on equipment was stronger than initially thought, pointing to underlying strength in manufacturing despite rising interest rates.

The most traded stock in the S&P 500 was Tesla , with $24.3 billion worth of shares exchanged during the session. Its shares rose 2.27%.

Of the 11 S&P 500 sector indexes, 10 rose, led by information technology .SPLRCT, up 2.69%, followed by a 2.52% gain in consumer discretionary.

The S&P 500 has rebounded about 13% from its closing low in mid-June and would have to climb another 15% to get back to its record high close in early January.

Moderna Inc MRNA.O surged about 16% after the vaccine maker announced a $3 billion share buyback plan.

Regeneron Pharmaceuticals climbed 5.9% after it beat quarterly revenue estimates, while coffee chain Starbucks Corp SBUX.O rose over 4% after it reported upbeat quarterly profits.

Advancing issues outnumbered falling ones within the S&P 500 .AD.SPX by a 3.7-to-1 ratio. The S&P 500 posted two new highs and 30 new lows; the Nasdaq recorded 51 new highs and 37 new lows.

Volume on U.S. exchanges was relatively heavy, with 11.7 billion shares traded, compared to an average of 10.7 billion shares over the previous 20 sessions.

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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