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U.S. stock futures traded higher ahead of Tuesday’s Wall Street session as optimism grew over President Biden’s $ 1.9 billion coronavirus relief package, which passes the Democratic convention.
| Ticker | Safety | Last | Alter | Alter% |
|---|---|---|---|---|
| Ek: DJI | DOW JONES AVERAGE | 31802.44 | +306.14 | + 0.97% |
| SP500 | S&P 500 | 3821.35 | -20.59 | -0.54% |
| I: COMP | NASDAQ COMPOSITION INDEX | 12609.161019 | -310.99 | -2.41% |
US stock indices mostly closed lower, as higher bond yields helped offset heavier sales of shares in technology companies.
The S&P 500 fell 0.5% to 3,821.35 after rising 1% earlier. Due to their large size, declines by Apple, Google’s parent company and other major technology stocks helped the S&P 500 to pull in the red, although more stocks rose than in the benchmark index.
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Sales, which accelerated towards the end of the day, dropped the technological Nasdaq compound by 10.5% from the all-time high it reached on February 12th. A drop of 10% or more from a recent high is known on Wall Street as a ‘correction’.
Bond yields rose sharply. Yields on the 10-year treasury note climbed from 1.55% late Friday to 1.60%. But it dropped to 1.57% after hours.
US stock futures traded higher ahead of Tuesday’s Wall Street session as optimism grows over President Biden’s $ 1.9 billion coronavirus relief package, which passes the Democratic convention. (Colin Ziemer / New York Stock Exch
Yields have risen higher with rising expectations for growth and the inflation that may follow. Higher returns generally put downward pressure, partly because it could send dollars that would place in the stock market away in bonds. This makes investors less willing to pay such high prices for stocks, especially those that seem the most expensive, such as technology stocks.
The Dow Jones industrial average rose 1% to 31,802.44. The Nasdaq lost 2.4% to 12,609.16.
Smaller shares in the company, which led the market higher this year, made more profit. The Russell 2000 index added 0.5% to 2,202.98.
Some of the best gains were made by financial stocks. Wells Fargo was up 3.3% and Citigroup was up 2.8%.
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Over the past few weeks, trading has become uncomfortable as investors worry about the rise in long-term interest rates in the bond market. The S&P 500 achieves its first weekly profit in three weeks.
Technology companies are lower as investors begin to doubt whether the huge gains they made during the pandemic months could continue as inflation increases.
Investors are betting that $ 1.9 billion in the coming stimulus from the government will help get the economy out of its coronavirus-induced ailment. There are also investors who bet that stimulus and an improving economy will cause some inflation.
The U.S. economic aid package, narrowly passed by the Senate on Saturday, offers direct payments of up to $ 1,400 for most Americans and extends emergency benefits to unemployment. It’s a victory for President Joe Biden and his Democratic allies, and final congressional approval is expected this week.
Oil prices also rose. After the pandemic subsided with the onset of the pandemic, prices recovered. Last week, some observers expected the OPEC cartel and its allies to lift more restrictions and allow oil to flow more freely. But OPEC has agreed to put most of the restrictions in place.
Meanwhile, Asian stocks were mixed by the expected course of the US stimulus package on Tuesday, although concerns about inflation and the coronavirus pandemic dampened optimism.
The Japan benchmark, Nikkei 225, added nearly 1.0% and ended at 29,027.94. South Korea’s Kospi decreased by 0.7% to 2,976.12. Australia’s S & P / ASX 200 added 0.5% to 6,771.20. Hong Kong’s Hang Seng rose 0.2% to 28,584.96, while the Shanghai Composite fell 1.8% to 3,359.26.
Jingyi Pan, IG’s senior market strategist in Singapore, said Asian markets weighed “the impact of a global recovery, coupled with the prospect of an accelerated rise in US yields.”
Yoshimasa Maruyama, chief economist at SMBC Nikko Securities, said the global economic boom was stronger than some had previously expected, and that recognition was widening in March than in February.
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“And this recognition of recovery in March itself will serve as a source of more confidence,” he said.
Vaccination of vaccines in the US and Europe will also help build confidence in future growth, he added.
Revised economic data for October-December, released on Tuesday, showed that the Japanese economy was growing at an annual rate of 11.7%. This was weaker than the 12.7% growth reported in the preliminary estimate last month.
Quarter-on-quarter, growth was 2.8%, revised from 3%, as public and private investment was not as positive as initially thought. The Japanese economy expanded at a rate of 22.8% in the July-September period. This followed a sharp contraction when the pandemic brought down tourism, trade, consumption and production.
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In energy trading, the standard U.S. crude oil added 2 cents to $ 65.07 a barrel for April delivery. It fell $ 1.04 or 1.6% to $ 65.05 a barrel on Monday. It has risen by 32.8% so far this year. Brent crude, the international standard, rose 16 cents to $ 68.40 a barrel.
In currency trading, the US dollar rose to 109.15 Japanese yen from 108.87 yen late Monday. The euro strengthened to $ 1.1855 from $ 1.1846.
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AP business writers Damian J. Troise and Alex Veiga contributed.