NEW YORK (Reuters) – The S&P 500 and Dow Jones Industrial Average peaked on Tuesday, with cyclical sectors gaining on the prospect of more fiscal aid to lift the U.S. economy out of a coronavirus crisis.
The Nasdaq, however, fell as technology stocks fell.
The sectors that should benefit the most from the reopening of the economy, including energy and finance, had the greatest gains. President Joe Biden has introduced a $ 1.9 trillion pandemic relief bill and is pressing Congress to approve it in the coming weeks to obtain $ 1,400 stimulus checks for Americans and to reinforce unemployment payments.
The S&P 500 banking index jumped 3.2%, with the yield on 10-year U.S. Treasury bonds reaching their highest since February 2020.
“Reflection trading continues to push stock markets across all industries and multis … and that upturn may continue in the short term,” said Tony Bedikian, head of global markets at Citizens Bank in Boston.
On the other hand, public services and real estate recorded the highest percentage losses among the S&P 500 sectors, and technology stocks also fell. Utilities and real estate, because of their steady earnings and high dividend yields, are often considered to be bond proxies and tend to move alongside Treasury bills.
The technology sector includes many stocks with high profit multiples, which may also come under pressure as earnings increase, according to some market analysts.
The S&P 500 retreated from session highs with yields rising on Tuesday, which reflected investor concerns about the day’s rise in bond yields, said Robert Phipps, director of Per Stirling Capital Management in Austin, Texas. The stock would likely tolerate a gradual rise in rates, but a higher sprint could create turbulence, in his view.
“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 gained 3.79 points, or 0.10%, to 3,938.62 and the Nasdaq Composite fell 25.65 points , or 0.18%, for 14,069.83.
A sharp drop in new coronavirus infections, progress in vaccinations and a stronger-than-expected fourth-quarter earnings season reinforced hopes for a quick business recovery this year.
This week’s earnings reports from Hilton Worldwide Holdings Inc, Hyatt Hotels Corp, Marriott International Inc, Norwegian Cruise Lines and TripAdvisor Inc will be watched closely for signs of increased global travel demand.
Shares in cryptocurrency and blockchain-related companies, including Silvergate Capital Corp, Riot Blockchain and Marathon Patent Group jumped between 8% and 21% while bitcoin briefly rose to $ 50,000.
Investors will also focus this week on the minutes of the January meeting of the Federal Reserve, where they reaffirmed their promise to maintain a dovish political stance.
Early issues outnumbered declining ones on the NYSE by 1.04 to 1; on the Nasdaq, a ratio of 1.17 to 1 favored the forwards.
The S&P 500 recorded 75 new 52-week highs and no new lows; the Nasdaq Composite recorded 363 new highs and nine new lows.
April Joyner reporting; Additional reporting by Devik Jain and Shreyashi Sanyal in Bengaluru; Editing by Saumyadeb Chakrabarty and Cynthia Osterman