NEW YORK (Reuters) – The S&P 500 and the Dow Jones industrial average peaked at an all-time high on Tuesday as cyclical sectors were able to gain fiscal support to pull the US economy out of a coronavirus-driven slump.
However, the Nasdaq declined as technology stocks moved lower.
Sectors that benefit most from a reopened economy, including energy and finance, have made the biggest gains. President Joe Biden has passed a $ 1.9 billion pandemic bill, urging Congress to pass it in the coming weeks to get $ 1,400 stimulus checks to Americans and boost unemployment payments.
The S&P 500 Bank Index rose 3.2% as U.S. Treasury yields peaked for ten years since February 2020.
“The reflection trade continues to drive stock markets in all industries and multicapitalizations … and this rally could continue in the short term,” said Tony Bedikian, head of global markets at Citizens Bank in Boston.
Conversely, utilities and real estate showed the largest percentage losses among S&P 500 sectors, and technology stocks also slipped. Utilities and real estate, because of their steady earnings and high dividend yields, are often considered bond attorneys and tend to move along with the treasury.
According to some market analysts, the technology sector contains many stocks with a high earnings multiple, which can also come under pressure with rising returns.
The S&P 500 bounced back from session highs as returns rose on Tuesday, reflecting investor concerns about the day’s rise in bond yields, said Robert Phipps, director of Per Stirling Capital Management in Austin, Texas. Shares are likely to tolerate a gradual rise in rates, but a sprint higher could cause turmoil, he said.
“Although interest rates are still very low, the stock market is going to be very, very sensitive to changes,” he said.
The Dow Jones Industrial Average rose 97.56 points, or 0.31%, to 31,555.96, the S&P 500 rose 3.79 points, or 0.10%, to 3,938.62, and the Nasdaq Composite rose by 25.65 points, or 0.18%, to 14,069.83.
A sharp drop in new coronavirus infections, progress with vaccinations and a stronger-than-expected earnings season for the fourth quarter strengthened hopes for a quick recovery of the business.
The earnings reports of Hilton Worldwide Holdings Inc, Hyatt Hotels Corp, Marriott International Inc., Norwegian Cruise Lines and TripAdvisor Inc. will be closely monitored for signs of an increase in global travel demand.
Shares of cryptocurrency and blockchain-related companies, including Silvergate Capital Corp, Riot Blockchain and Marathon Patent Group, jumped between 8% and 21% when bitcoin briefly climbed past $ 50,000.
Investors will also focus this week on the minutes of the Federal Reserve’s January meeting, where he reaffirms his promise to maintain a policy of the pigeons.
Progressive issues were less than declining on the NYSE with a 1.04-to-1 ratio; on Nasdaq, a 1.17-to-1 ratio was favored.
The S&P 500 reached 75 new 52-week highs and no new lows; the Nasdaq Composite recorded 363 new highs and nine new lows.
Reporting by April Joyner; Additional reporting by Devik Jain and Shreyashi Sanyal in Bengaluru; Edited by Saumyadeb Chakrabarty and Cynthia Osterman