Wall Street treads water after record rally on economic rebound hopes

Economy (Apr 06, 2021 11:30AM ET)1Wall Street treads water after record rally on economic rebound hopes

© Reuters. FILE PHOTO: A U.S flag is seen on the New York Stock Exchange in the Manhattan borough of New York City

By Medha Singh and Shivani Kumaresan

(Reuters) – Wall Street’s main indexes treaded water on Tuesday as investors stayed on the sidelines a day after the S&P 500 and the Dow closed at record highs on renewed recovery hopes.

The S&P 500 has risen for three straight sessions with volatility index retreating to pre-pandemic lows, driven by fiscal stimulus packages and swift COVID-19 vaccinations in the United States.

Areas of the market expected to benefit the most from a reopening economy – energy, financials industrials – outperformed on Tuesday. The small-cap Russell 2000 added about 0.4%, while the Dow Jones Transports index edged 0.2% higher.

“The reasons for optimism are the COVID winter is coming to an end and with the vaccines we can see the light at the end of the tunnel. There seems to be a spring in the economy,” said Darren Schuringa, chief executive officer of ASYMmetric ETFs in New York.

“We’re seeing broad-based strength and that’s a positive. This trend that economically sensitive sectors outperform broader markets will continue if the economy continues to expand.”

Tech and other growth stocks have awakened after lagging in recent weeks behind so-called value stocks expected to outperform as the economy emerges from the coronavirus pandemic.

The tech-heavy Nasdaq is now about 3% from its February record high after falling as much as 12% from that level.

Progress in President Joe Biden’s new infrastructure proposal and the start of the earnings season in the coming weeks could dictate the course of stock markets, analysts said.

Data on Tuesday showed U.S. job openings increased more than expected in February. The data follows blowout employment as well as service sector reports for March.

At 9:56 a.m. ET, the Dow Jones Industrial Average was down 16.38 points, or 0.05%, at 33,510.81, the S&P 500 gained 3.40 points, or 0.08%, at 4,081.31. The Nasdaq Composite rose 14.35 points, or 0.10%, at 13,719.94.

Snap Inc (NYSE:SNAP) jumped 6.5% after Atlantic Equities upgraded its rating on the photo-messaging app owner’s shares to “overweight” from “neutral”.

Norwegian Cruise Line (NYSE:NCLH) Holdings Ltd added 2.4% as it said it would begin sailing outside the United States from the Caribbean and Greek Isles in July, restarting trips after a year-long hiatus brought on by the pandemic.

Advancing issues outnumbered decliners by a 1.55-to-1 ratio on the NYSE and by a 1.01-to-1 ratio on the Nasdaq.

The S&P index recorded 17 new 52-week highs and no new low, while the Nasdaq recorded 58 new highs and five new lows.Wall Street treads water after record rally on economic rebound hopes1Comments (1)

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