Pedestrians walk in snow past the Wall Street subway station near the New York Stock Exchange.
Michael Nagle | Bloomberg | Getty Images
Forward contracts linked to major US stock indices rose at the start of extensive trading Monday night after being strong last week.
Dow futures rose 180 points, suggesting an implied opening of about the same size, while S&P 500 contracts added 19.25 points or 0.5%. Nasdaq 100 futures gained 67.5 points, or 0.5%.
The US stock market was closed for Presidents Day on Monday.
The major averages rose sharply last week, even though the rally in February appears to have cooled slightly. The Dow Jones industrial average with a blue chip changed two days, while the S&P 500 fluctuated within 0.2% for three consecutive days.
Still, the S&P 500 ended the week with a 1.2% increase, while the Dow added 1%. The technology Nasdaq Composite rose 1.7%. All three closed at record levels on Friday.
Stock strategists say that the launch of the Covid-19 vaccine, the economic reopening and expectations for more fiscal stimulus are the key to the lively February so far.
“Covid is far from defeated, but the path to economic normalization is becoming clearer as more vaccines that reduce hospitalizations and eliminate deaths are approved,” Evercore ISI strategist Dennis DeBusschere said in an email.
“Treasury Secretary [Janet] Yellen’s Powerful Arguments for Additional Stimulus Followed by Fed Chairman [Jerome] Powell described the maximum employment rate as’ our national target ‘, which helped boost inflation, inflation expectations and oil prices last week,’ he added.
The Dow rose 4.9% in February, while the S&P 500 and the Nasdaq rose 5.9% and 7.8% respectively. The S&P 500 has ten records close to 2021.
Nevertheless, DeBusschere warned that rising interest rates and an uncertain short-term policy outlook could prevent trading from becoming too volatile, and recommended that investors stick to the cyclical stocks that may see the most upward as the U.S. economy recovers.
The so-called cyclical sectors, the most sensitive to an economic recovery, led the march in February. Energy is up to 13% higher to date, and finance and materials are also one of the leading sectors.
In corporate news, CVS Health, Occidental Petroleum, Palantir and others will report their revenue on Tuesday.
Managers of Robinhood, Melvin Capital and Citadel will testify before the House Financial Services Committee on Thursday. Lawmakers are likely to focus the group on the wild trading of GameStop and other heavily shortened stocks.
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