US Stocks End Mixed Amid Recovery Hopes, Bond Selloff

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Summary

• S&P 500 shed 0.54%, Dow Jones was up 0.97%, and NASDAQ was down 2.41%.
• Lawmakers mull financial-transaction tax (FTT) for securities trades to curb volatility.
• President Joe Biden’s US$1.9 trillion relief bill set for a final Senate vote on Tuesday.

US stocks ended mixed on Monday ahead of a crucial Senate vote on President Joe Biden’s US$1.9 trillion stimulus package this week, even as investors continued to retreat from safe heaven assets.

The S&P 500 shed 0.54% to 3821.35. The Dow Jones Industrial Average was up 0.97% to 31802.44. The NASDAQ Composite Index was down 2.41% to 12609.16, and the small-cap Russell 2000 saw a marginal gain of 0.49% to 2202.98.

Investors appeared confident about the prospect of economic recovery after last week’s reassuring labor data and Senate’s approval of the Covid relief bill over the weekend, but it will still require going through a final vote. The trend of selloffs in tech stocks and treasury bonds continued Monday as investors turned their attention to economically sensitive growth stocks amid a gradual recovery.

The 10-year Treasury bond yields had closed at 1.551 last Friday, which was the highest since February 2020. Analysts believe that largescale bond selloff, which is driving up the yield, is connected to increased investors’ confidence in the recent upswing in the economy. Last week, Senate Democratic and Republican members had ironed out their differences on some of the key details of the relief plan. The bill is scheduled for a final vote in the Senate on Tuesday.

The Biden administration plans to release the funds without further delay as it sets out its agenda for Covid relief, which includes extending unemployment benefits, rapid distribution of vaccines, the opening of educational institutions, and economic revival. A major part of the fund would also go to small-and-medium-sized enterprises that are responsible for most job creation, to jumpstart hiring. The stimulus checks would be key as spending constitutes a major part of the US economic activity.

Basic materials, financials, utilities, industrials, consumer non-cyclicals, real estate, consumer cyclicals, energy, healthcare, and technology stocks saw subdued gains on Monday.

Pic Credit: Pixabay.

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Top Gainers

Top performers on S&P 500 included ViacomCBS Inc (12.47%), HanesBrands Inc (8.95%), Vornado Realty Trust (7.41%), and United Airlines Holdings Inc (7.09%). On NASDAQ, top performers were Second Sight Medical Products Inc (75.48%), Greenwich Lifesciences Inc (48.13%), OpGen Inc (42.09%), and Anchiano Therapeutics Ltd (36.53%). On Dow Jones, Walt Disney Co (6.08%), Cisco Systems Inc (3.22%), Visa Inc (3.13%), and Walgreens Boots Alliance Inc (2.88%) were among the leaders.

Top Losers

Top laggards on S&P 500 included Norwegian Cruise Line Holdings Ltd (-11.40%), Carnival Corp (-6.06%), Royal Caribbean Cruises Ltd (-5.65%), and Enphase Energy Inc (-3.90%). On NASDAQ, Soleno Therapeutics Inc (-47.03%), AnaptysBio Inc (-33.90%), Highpeak Energy Inc (-27.52%), and Luokung Technology Corp (-26.27%) were the losers. On Dow Jones, Apple Inc (-3.53%), Microsoft Corp (-0.97%), Salesforce.Com Inc (-0.94%), and Walmart Inc (-0.67%) were among the laggards.

Image Source: Refinitiv, S&P 500 One Year price chart, March 8, 2021.

Volume Movers

Top volume movers included Apple Inc (22.83mn), General Electric Co (12.70mn), Ford Motor Co (11.42mn), Advanced Micro Devices Inc (9.88mn), Tesla Inc (9.27mn), Microsoft Corp (8.71mn), Second Sight Medical Products Inc (57.63mn), OpGen Inc (38.33mn), Sundial Growers Inc (20.56mn), AT&T Inc (7.46mn), Cisco Systems Inc (7.41mn), Carnival Corp (7.03mn), American Airlines Group Inc (6.78mn), and Castor Maritime Inc (11.49mn).                          

Futures & Commodities

Gold futures were down 1.22% to $1,677.70 per ounce, silver prices plunged 0.45% to $25.172per ounce, and copper was marginally up 0.05% to $4.0777.

Brent oil futures were down 1.99% to $67.98 and WTI crude shed 2.07% to $64.72 per barrel.

Bond Market

The 30-year treasury bond yields were up 1.46% to 2.321, while the 10-year bond yields were up 2.81% to 1.598.

US Dollar Futures Index was up 0.48% to 92.433.

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In other development, some Democrats were reportedly favoring a financial-transaction tax, or FTT, for securities trades to curb volatility in the stock market. The recent instability in the markets is prompting lawmakers to take steps that may prevent such events from happening in the future.

Democratic senators, like Bernie Sanders, were backing the proposal, which envisages levying a portion of the value of securities trades. But some Wall Street investors, however, have criticized the plan, saying it will hurt the interest of the markets. The proponents, on the other hand, argue that given a steady recovery of the US economy, the administration should also focus on the issue of market volatility since it can potentially impact other areas of the financial system.