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Summary
- S&P 500 moved up 1.14%, NASDAQ up by 0.99%, and Dow Jones gained 1.35%.
- Fed chief Jerome Powell reassures Senate Committee of easy-monetary policy.
- Nvidia, L Brands, and others to present earnings reports after markets close.
After a brief lull, US stock markets came back strongly to end the session higher on Wednesday, driven by hopes of a faster economic recovery and Fed chief’s reassurances before a Senate committee to keep an easy monetary policy to spur growth.
The S&P 500 moved up 1.14% to 3925.43. The Dow Jones Industrial Average gained 1.35% to 31961.86. The NASDAQ Composite Index was up 0.99% to 13597.97 and the small-cap Russell 2000 ticked 2.38% to 2284.37.
Investors were upbeat after the Federal Reserve Chairman, Jerome Powell, reassured in the last two Congressional hearings that the central bank would maintain a flexible monetary policy. The tech-heavy NASDAQ, which plunged 0.50% in the last session, returned to green on Wednesday. The Dow Jones gained a record 424.78 points, or around 1.35%, at close.
Markets had remained subdued over the past couple of sessions as investors held back from high-yield stocks and looked for other greener pastures with the improvement in the economy. Tech stocks, which have been a favorite among small investors last year, had retreated in recent days.
The encouraging Fed comments, coupled with the government’s strong COVID plan, raised hopes of early recovery. Investors, buoyed by the positive sentiment, appeared willing to take risks. Interest in safe-haven assets increases when the economy weakens, but analysts, however, say that with an improved outlook, they would now want to rotate their high-value scrips with other growth stocks.
Sectors that have been lagging in the past few sessions bounced back on Wednesday. For instance, healthcare, basic materials, industrials, technology, consumer cyclical and non-cyclical, energy, real estate, and financials were struggling before rebounded strongly. Investors would also look forward to earnings reports, including Nvidia and L Brands, which were to report after markets close.
©Kalkine Group 2021
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Top Gainers
Top performers on S&P 500 included Norwegian Cruise Line Holdings Ltd (9.96%), Mosaic Co (9.14%), United Airlines Holdings Inc (8.91%), and Iron Mountain Inc (8.69%). On NASDAQ, top performers were Sypris Solutions Inc (114.29%), Immunome Inc (65.66%), 9F Inc (31.94%), and Greenbox Pos (30.99%). On Dow Jones, Boeing Co (7.69%), Chevron Corp (3.92%), Visa Inc (3.71%), and Goldman Sachs Group Inc (3.51%) were the volume leaders.
Top Losers
Top laggards on S&P 500 included Verisk Analytics Inc (-9.04%), Lowe's Companies Inc (-3.36%), eBay Inc (-3.21%), and Leidos Holdings Inc (-3.14%). On NASDAQ, Constellation Pharmaceuticals Inc (-26.38%), Overstock.com Inc (-17.49%), Tuscan Holdings Corp (-15.52%), and Rezolute Inc (-15.32%) were among the losers. And on Dow Jones, Home Depot Inc (-2.15%), Walmart Inc (-1.53%), Amgen Inc (-0.95%), and Apple Inc (-0.55%) were among the top laggards.
Image Source: Refinitiv, S&P 500 YTD price chart, 24 February 2021.
Volume Movers
Top volume movers included Sundial Growers Inc (34.82mn), Sypris Solutions Inc (33.16mn), Workhorse Group Inc (19.27mn), Apple Inc (18.58mn), American Airlines Group Inc (13.35mn), Sunesis Pharmaceuticals Inc (10.28mn), Ford Motor Co (11.79mn), Carnival Corp (11.45mn), General Electric Co (9.96mn), Microsoft Corp (6.22mn), and Intel Corp (4.74mn).
Futures & Commodities
Gold futures were down 0.23% to $1,801.70 per ounce, silver prices were up 0.96% to $27.953 per ounce, and copper gained 2.99% to $4.3125.
Brent oil futures were up 2.85% to $66.32 and WTI crude edged up 2.82% to $63.41 per barrel.
Bond Market
The 30-year treasury bond yield was up 1.31% to 2.228, while the yield on the 10-year bond was up 0.98% to 1.377.
US Dollar Futures Index was down 0.13% to 90.050.
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While the US economy is looking up, concerns over spike in mortgage rates, proposed income tax hikes, and commodity price rise have been a source of concern. Boosted by home sales, mortgage rates had hit record highs in November last year, but it also pulled back the sales impetus. According to an estimate, new homes sales had risen by 19% in January year-on-year.
The mortgage rates are currently low but the increase in lumber rates may offset the benefits. A mortgage bankers’ association estimates that the 30-year fixed-rates increased to 2.81% last week.
Also, tax hikes were proposed for people earning more than $5 million. States hope to reduce budgetary constraints because of COVID pay-outs from new tax collections. New York is leading the proposal and many other states are in favor.
