US Stocks Rise As Bond Yield Stalls, Rate Fear Wanes

Source: photofriday,Shutterstock

Summary

• S&P 500 was up 2.38%, Dow Jones gained 1.95%, and NASDAQ rose 3.01%
• Zoom Video, Novavax, NIO., and Clearway to report quarterly earnings after markets close.
• All sectors accelerate after previous week’s decline, posting modest gains.

All major US stock indexes closed higher on Monday as the ascent of treasury bond yields appeared to have slowed down from last week’s surge and fears over Fed interest rate hike abated.

The S&P 500 was up 2.38% to 3901.82. The Dow Jones Industrial Average gained 1.95% to 31535.51. The NASDAQ Composite Index rose 3.01% to 13588.83, and the small-cap Russell 2000 added 3.37% to 2275.32.

Markets had seen subdued gains last week as concerns over a potential federal rate hike grew amid rising bond yields which had threatened to push up inflationary pressures. But prices cooled off significantly over the weekend with the 10-year bond losing more than 8% to 1.456.

The rising bond yield had a knock-on effect on markets, dragging down the blue-chip tech stocks and other high performers which had benefitted from the easing of restrictions and economic recovery. It had also raised the prospect of the central bank increasing interest rates to curb inflation.

Monday’s positive sentiments were buoyed by hopes of continuous progress of the economy on the back of rising retail sales and positive labor data. Unemployment claims had dropped to 730,000 late last week, suggesting a decline in layoffs as more people have rejoined the workforce in February.

Additionally, the Biden administration is expected to roll out supplementary relief in the coming days as the current round of unemployment grants is due to end in the next few weeks. He has asked the Senate to speed up the appropriation process after the House cleared his relief package.

From the corporate world, Zoom Video, Novavax, NIO Inc., and Clearway Energy were expected to report their quarterly earnings after markets close. Sectors, including financials, utilities, industrials, basic materials, energy, technology, consumer non-cyclicals, consumer cyclicals, healthcare, real estate, and Academic & Educational Services have bounced back from the previous week’s decline.

©Kalkine Group 2021

Also read: Buffett’s Berkshire (BRK.A) Bought Back US$25 Bn Of Own Stock in 2020

Top Gainers

Top performers on S&P 500 included DENTSPLY SIRONA Inc (13.10%), NRG Energy Inc (12.65%), ETSY Inc (11.67%), and Invesco Ltd (11.15%). On NASDAQ, top performers were Morphic Holding Inc (126.91%), Aemetis Inc (58.09%), Canaan Inc (42.74%), and The9 Ltd (42.09%). On Dow Jones, Boeing Co (5.67%), Apple Inc (5.10%), Dow Inc (4.13%), and Goldman Sachs Group Inc (3.81%) were the volume leaders.

Top Losers

Top laggards on S&P 500 included Albemarle Corp (-3.08%), SBA Communications Corp (-2.17%), Carnival Corp (-1.76%), and Royal Caribbean Cruises Ltd (-1.73%). On NASDAQ, Athenex Inc (-54.88%), Ontrak Inc (-44.44%), CorMedix Inc (-41.47%), and MannKind Corp (-23.82%). On Dow Jones, Walgreens Boots Alliance Inc (-0.50%), Salesforce.Com Inc (-0.31%), Merck & Co Inc (0.15%), and Verizon Communications Inc (0.58%).

Image Source: Refinitiv, S&P 500 YTD price chart, 1 March 2021.

Volume Movers

Top volume movers included Apple Inc (15.78mn), American Airlines Group Inc (6.80mn), Carnival Corp (6.39mn), General Electric Co (6.18mn), Ford Motor Co (5.64mn), Sundial Growers Inc (18.67mn), ElectroCore, Inc. (15.21mn), Aslan Pharmaceuticals Ltd (9.28mn), Workhorse Group Inc (8.59mn), Canaan Inc (7.77mn), Microsoft Corp (5.32mn), Intel Corp (4.75mn), Cisco Systems Inc (2.55mn), and JPMorgan Chase & Co (2.07mn).     

Futures & Commodities

Gold futures were down 0.31% to $1,723.45 per ounce, silver prices were up 0.70% to $26.625 per ounce, and copper was up 0.33% to $4.1060.

Brent oil futures were down 1.51% to $63.45 and WTI crude dropped 1.76% to $60.42 per barrel.

Bond Market

The 30-year treasury bond yields were up 0.60% to 2.195, while the 10-year bond yields dropped 2.21% to 1.424.

US Dollar Futures Index was up 0.19% to 91.055.

Also read: Are Technology Stocks More Volatile?

In other news, New York Attorney General Letitia James has cautioned investors when buying cryptocurrencies, which she said were prone to high risks due to their price volatility. Dealers of digital currencies were asked to register with her office. Bitcoin had surged to a record high of $55,000 early this month, but it has slumped since and was hovering around $48,000 on Monday.

On the economic front, the Federal Reserve said that short-term vulnerabilities in the markets remain, but the central bank will continue to advance reforms to tackle any eventualities. She stressed increasing the resilience of Treasury markets in view of the recent fluctuations.

Investors would also look forward to earnings reports from Hewlett Packard, Bentley Systems, and Kohl's Corporation on Tuesday. Bentley and Kohl's were expected to report before markets open.