US Markets Surge As Energy, Financials Fly High, Inflation Fears Ebb

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Summary

• S&P 500 rose 0.60%, Dow Jones was up 1.46%, and NASDAQ shed 0.04%.
• General Electric Co. to merge GE Capital with rival AerCap in a US$30 billion deal.
• The 10-year Treasury bond yields were down 1.81% to 1.516 on Wednesday.

US markets closed higher on Wednesday after energy, financials, and energy stocks surged as new data showed that inflation continued to remain low, and effects of the stimulus plan took hold.

The S&P 500 rose 0.60% to 3898.81. The Dow Jones Industrial Average was up 1.46% to 32297.02. The NASDAQ Composite Index shed 0.04% to 13068.83, and the small-cap Russell 2000 rose 1.81% to 2285.68.

High Treasury bond yields in recent weeks had raised fears of a sharp increase in inflation, pulling back investors from betting on high-value stocks that may potentially slide from market variations.

The latest government data revealed on Wednesday that inflation rose moderately by 0.4% in February, calming the concerns in markets about a possible rate hike to counter the price rise. Bond yields have also settled low in the past two days, pausing their quick ascent in the previous week. The 10-year bond note ticked down to around 1.516%, from 1.540% on Wednesday.

In other positive news, a survey of Washington-based think-tank Urban Institute revealed that tax collections in US states, which were earlier projected to dive to a record low, remained flat in 2020. The improvement in the job market and effects of government stimulus in the second half of the year helped avoid a possible cash crisis.

Also, US Agri exports to China surged after both sides reached a deal in January following a bitter trade war. According to the US Agriculture Department, the volume of Agri and meat exports to China last year stood at 55.5 million tons. It expects the trade momentum to continue in 2021.

Meanwhile, stocks continued their rally on Wednesday, buoyed by the prospects of new opportunities from an economic rebound. The recent market swings had made the stocks of blue-chip tech companies and the so-called SPACs (special purpose acquisition company) waver.

SPACs are shell firms listed on the exchanges and help startups to go public through a merger. These companies had seen impressive gains in 2020 and had succumbed to a volatile market this year.

In the corporate world, General Electric Co. announced to wind-down its jet-leasing arm GE Capital after prolonged debt woes. Rising debts had eclipsed its performance. The company agreed to a merger deal worth US$30 billion between GE Capital Aviation Services and AerCap. GE (NYSE:GE) stocks were down around 5% at 3.57 pm ET, but they were among the top volume movers.

The California-based video gaming company Roblox Corp. made its debut on the New York Stock Exchange on Wednesday. The stock opened at US$64.50 apiece, before settling at US$69.50. Based on the opening trade, the company is valued at around $42 billion.

Wednesday’s session was led by stocks of energy, financials, basic materials, consumer non-cyclicals, industrials, real estate, utilities, consumer cyclicals, and healthcare. Technology stocks saw muted gains after seeing a rally on Tuesday.

Pic Credit: Pixabay.

Also read: RBLX Stock: How Roblox Played Smart With Its Public Debut?

Top Gainers

Top performers on S&P 500 included Franklin Resources Inc (9.25%), Mosaic Co (6.95%), Boeing Co (6.13%), and HollyFrontier Corp (5.82%). On NASDAQ, top performers were Walgreens Boots Alliance Inc (3.98%), Lululemon Athletica Inc (3.17%), Comcast Corp (3.00%), and Intuitive Surgical Inc (2.79%). On Dow Jones, Boeing Co (5.89%), Walgreens Boots Alliance Inc (4.13%), Goldman Sachs Group Inc (3.35%), and Dow Inc (3.05%) were among the leaders.

Top Losers

Top laggards on S&P 500 included NRG Energy Inc (-5.36%), General Electric Co (-4.96%), Hologic Inc (-4.67%), and Teradyne Inc (-4.40%). On NASDAQ, Micron Technology Inc (-4.40%), Peloton Interactive Inc (-4.20%), Baidu Inc (-4.02%), and Lam Research Corp (-3.96%) were the losers. On Dow Jones, Apple Inc (-0.66%), Intel Corp (-0.49%), Microsoft Corp (-0.47%), and UnitedHealth Group Inc (-0.32%) were among the laggards.

Image Source: Refinitiv, S&P 500 One Year price chart, March 10, 2021.

Volume Movers

Top volume movers included General Electric Co (23.54mn), Apple Inc (17.36mn), Tesla Inc (10.71mn), Ford Motor Co (8.04mn), Advanced Micro Devices Inc (7.34mn), Microsoft Corp (7.25mn), American Airlines Group Inc (6.48mn), Bank of America Corp (5.99mn), Marvell Technology Group Ltd (5.54mn), Intel Corp (4.90mn), Sirius XM Holdings Inc (4.89mn), Comcast Corp (4.48mn), and Cisco Systems Inc (3.53mn).         

Futures & Commodities

Gold futures were up 0.38% to $1,723.40 per ounce, silver prices rose 0.40% to $26.288 per ounce, and copper was up 0.69% to $4.0362.

Brent oil futures were up 1.13% to $68.28 and WTI crude rose 1.27% to $64.82 per barrel.

Bond Market

The 30-year treasury bond yields were down 0.83% to 2.240, while the 10-year bond yields were down 1.81% to 1.516.

US Dollar Futures Index was down 0.18% to 91.802.

Also read: Ethereum May Hit US$3,000 As Demand-Supply Equation Changes

The stock markets have stabilized in recent days after witnessing high volatility, driven by social media investors and a sharp rise in bond yields. However, markets remained vigilant over the covid developments and a fresh cybersecurity risk flagged by Microsoft.

Pharmaceutical companies like Novavax and Moderna are researching drugs that can overcome new variants of the virus, identified in the UK and some African and Latin American countries.

Also, US lawmakers have voiced concern over the involvement of Chinese hackers targeting Microsoft’s Exchange software. Ten and thousands of people use the software in the US. According to security experts, the hackers were using US-based computers to launch their attacks.