Tesla On The Road To S&P 500 As Dollar Tumbles

Electric car maker Tesla (TSLA) has posted four consecutive quarters of profit for the first time in its 17-year history. The record makes it eligible for inclusion in the S&P 500 index of US stocks. Despite the global pandemic, the car maker eked out a $104 million profit in Q2. Tesla shares have already been on a run ahead of this news. The share price hit a low of $361 on  March 18, but has since soared to $1,592. Investors reacted mutedly to the profit news however, with the share price gaining 1.53% on the day. 

Elsewhere the US dollar (UDN) extended its losses, falling for the fourth session in a row. The weakening of the dollar highlights investor concerns around a second wave of coronavirus in the US. The falls are however spurring investments in areas of the market that become good value as the major world currency’s value declines. Precious metal stocks and Treasury bonds have all risen on the weakening dollar as foreign investors take advantage of the cheapening stocks. The gold price has risen to $1,865 a troy ounce, just 1.4% off its 2011 high from the last recession (GLD). 

Healthcare and housebuilders on the up as energy stocks retreat

The three major stock indices in the US were all up modestly on Wednesday, led higher by a mixture of healthcare, tech and companies, benefiting from reopening. In the S&P 500, which closed 0.6% higher, HCA Healthcare (HCA) led the way, gaining 12% while home construction firm NVR (NVR) was up 10.7% and graphics card manufacturer AMD (AMD) rose 8.4%. The rest of the top 10 were a mixed bag of healthcare, financial and manufacturing. In the Dow Jones, pharmaceutical maker Pfizer (PFE) was up 5.1% while Dow Inc rose 3%. Energy stocks went into retreat however with several in the top 10 fallers in the S&P 500. FirstEnergy Corp (FE) lost most heavily, down 20.9% while financial firm Northern Trust Corp (NTRS) was down 5.3%. In the Dow Jones, the biggest fallers on the day were also financial and energy with Goldman Sachs (GS) retreating 2.8% and ExxonMobil (XOM) down 2.3%. 

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