Stimulus jitters dent Wall Street's early gains; Nasdaq hits record
Reuters
Published Jan 25, 2021 07:18AM ET
Updated Jan 25, 2021 04:20PM ET
By Chuck Mikolajczak
NEW YORK (Reuters) - Major U.S. averages on Monday closed well off their best levels of the day, which included a Nasdaq record, as concerns over the timing and size of fiscal stimulus dented optimism at the start of a week of earning reports from mega-cap companies.
Investors turned their focus to the U.S. Senate, which is aiming to pass COVID-19 relief legislation before former President Donald Trump's impeachment trial begins in early February.
Officials in President Joe Biden's administration are trying to head off Republican concerns that his $1.9 trillion pandemic relief proposal is too expensive.
"What is really underpinning the market is the stimulus – that is what it is all about," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.
"The market loves money, whether it is fiscal or monetary, and right now you have both. So if you do pull the rug out from stimulus plans, that might be a problem, but they aren't going to do that."
Unofficially, the Dow Jones Industrial Average fell 33.77 points, or 0.11%, to 30,963.21, the S&P 500 gained 14.39 points, or 0.37%, to 3,855.86 and the Nasdaq Composite added 95.76 points, or 0.71%, to 13,638.82.
After climbing as much as 1.4% to an intraday record, the Nasdaq gave back a good portion of its gains, with the so-called "stay-at-home" winners, including Microsoft Corp (NASDAQ:MSFT), Facebook Inc (NASDAQ:FB) and Apple Inc (NASDAQ:AAPL), rising after upbeat results from Netflix Inc (NASDAQ:NFLX) last week.
Microsoft, scheduled to report results on Tuesday, rose as Wedbush raised its price target on the software maker's stock on expectations of further growth in its cloud business for 2021.
The S&P 500 sectors housing large-cap growth stocks, including technology, consumer discretionary and communication services, hit record highs early in the session.
Wall Street's main indexes hit all-time highs last week on optimism for a more complete economic reopening and smooth vaccine distribution across the country, which is suffering from more than 175,000 new COVID-19 cases daily with millions out of work.
Earlier on Monday, drugmaker Merck & Co said it would stop development of its two COVID-19 vaccines.
Gamestop shares closed higher in volatile trading in a session that saw the video game retailer climb as high as $159.18 and drop as low as $61.13 on the day as investors rushed to cover short bets.
Sectors that have performed well on hopes for an economic rebound, such as financials, energy and materials, led declines on Monday, while defensive utilities, consumer staples and real estate outperformed. Weakness in financial names such as Goldman Sachs (NYSE:GS) and American Express (NYSE:AXP) served to keep the price-weighted Dow in negative territory.
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Written By: Reuters
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