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Market roundup for Sept. 4

September 4, 2020 | Caribbean Business

SAN JUAN — The U.S. stock market finished the week Friday with more losses as all indices fell sharply.

However, not all the news was negative. The U.S. economy continued its pace toward recovery with additional improvements in key indicators.

  • The U.S. Bureau of Labor Statistics reported that unemployment fell to 8.4% last month, a decrease of 17.64%, which is still high compared with the historical average of 5.76%.

  • The U.S. Labor Department reported 1.4 million jobs gained in August, in line with estimates.

  • The U.S. Trade Deficit fell to $53.46 billion, down from $57.85 billion last month, a 7.59% change from the previous month.

A new development circulated today in the options market.

Do you know what stock options are?

Stock options allow investors to buy or sell a stock in the future at a fixed price somewhere above or below where it is currently trading. They serve as an essential hedging tool against losses for most portfolios; however, they can also lead to big swings and gains.

On Friday, it was revealed that Japanese conglomerate Softbank had bought billions of dollars in a series of stock option trades that caused a part of the significant rally in technological stocks.

These stock option purchases are said to be the largest ever trading volumes, which in my opinion, is a hazardous development.

On to markets,

  • The Dow Jones Industrial Average closed at 28,133.31, down 159.42 points, or 0.56%.

  • The Standard & Poor’s 500 Index closed at 3,426.96, down 28.10 points, or 0.81%.

  • The NASDAQ Composite Index closed at 11,313.13, down 144.97 points, or 1.27%.

  • The Birling Capital Puerto Rico Stock Index closed at 1,573.74, up 8.09 points, or 0.51%.

  • The U.S. Treasury 10-year note closed up at 0.72%.

  • The U.S. Treasury 2-year note closed up at 0.14%.

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