Stock prices can be influenced by news from various sectors, from company-specific announcements to national or global events. Successful traders need to understand the relevance and impact of these news events, and make trading decisions based on them. A successful trading strategy includes a combination of buying and selling action. The types of news that are important to monitor include:
Suits and company issues: These news items can cause stocks to decline quickly and continue to decline in value over the long term. They can include lawsuits filed by individuals or investors, as well as issues such as the Chipotle nationwide E. coli outbreak or the Equifax data breach, both of which cause significant backlash and cast doubt on the companies’ future outlooks.
Product launches: Often, announcements of a new product or service will create a lot of hype in the market and reflect that in the stock price. However, once the initial excitement wears off, stock prices can return to the levels they were at before the announcement. Recently, Apple has announced new iPhone models and Amazon has made headlines with its healthcare announcements.
In the U.S., equities ended higher on Friday. The Dow rose by 748 points on Friday, while the Nasdaq Composite advanced 2.3%, notching a 5.2% weekly gain. The S&P 500 rose by 2.4% on Friday, and all sectors of the S&P 500 ended in positive territory. Energy and technology were the sectors that saw the most gains.