Pedestrians walk in the snow past the Wall Street subway station, close to the New York Stock Exchange.
Michael Nagle | Bloomberg | Getty Images
Futures contracts linked to the main US stock indices rose at the beginning of the extended trading on Monday night, after ending strong last week.
Dow futures rose 180 points, suggesting an implicit opening of approximately the same magnitude, 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 on Monday for President’s Day.
The main averages ended last week with decent gains, even as the February recovery seemed to cool off a bit. The blue-chip Dow Jones Industrial Average posted two little changed days, while the S&P 500 fluctuated within 0.2% for three consecutive days.
Even so, the S&P 500 ended the week up 1.2%, while the Dow totaled 1%. The high-tech Nasdaq Composite grew 1.7%. All three closed at record levels on Friday.
Stock strategists say the launch of the Covid-19 vaccine, the economic reopening and expectations of more fiscal stimulus are fundamental to the good performance of the market in February so far.
“Covid is far from defeated, but the path to economic normalization is clearer as more vaccines that reduce hospitalizations and eliminate fatalities are approved,” said Dennis DeBusschere, strategist at Evercore ISI, in an email.
“Secretary of the Treasury [Janet] Yellen’s vigorous arguments for further stimulus followed by the Fed chairman [Jerome] Powell described peak employment as ‘our national target’, which helped raise bond yields, inflation expectations and oil prices last week, “he added.
The Dow gained 4.9% in February, while the S&P 500 and Nasdaq rose 5.9% and 7.8%, respectively. The S&P 500 recorded ten record closings in 2021.
Still, DeBusschere warned that rising interest rates and an uncertain policy outlook could prevent businesses from growing too frothy in the short term and recommended that investors stay in cyclical stocks, which can see the upside with the recovery in US economy.
The so-called cyclical sectors, the most sensitive to an economic recovery, led the rise in February. Energy has risen more than 13% in the month so far, with finance and materials also among the main sectors.
In corporate news, CVS Health, Occidental Petroleum, Palantir and others will report earnings on Tuesday.
Executives from Robinhood, Melvin Capital and Citadel are due to testify before the House’s Financial Services Committee on Thursday. Lawmakers are likely to question the group about GameStop’s wild trading and other heavily shorted stocks.
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