The S&P 500 and the Dow indexes rose on Tuesday as investors poured into economically sensitive sectors on bets that fiscal stimulus would revive a COVID-19-battered economy, with a slate of positive earnings reports also helping to fuel the sentiment.
Financials, industrials and energy provided the biggest boost to the S&P 500 and the Dow. The energy sector jumped 6.4% on prospects of higher demand for fuel. The Nasdaq slipped after hitting an intraday record high earlier in the session, as shares of high-profile companies including Amazon.com Inc, Apple Inc and Microsoft Corp retreated.
U.S. lawmakers and White House officials are negotiating a new coronavirus aid legislation amid a looming expiration of additional unemployment assistance… Said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina, “The vaccine story has been very positive for the last couple days and that’s part of the optimism on moving a little bit more towards cyclicals.”
With the second quarter expected to see the worst of the pandemic’s hit on profits, investors are more focused on hints on how long Corporate America would take to bounce back.
MacDailyNews Take: Amid the beginning of negotiations on another U.S. stimulus package, the European Union on Monday agreed on a large fiscal stimulus program. The EU fiscal stimulus package is about $2 trillion, or a little less than 1 billion Euros and is funded largely by a Euro-denominated debt issuance. Most observers expect additional fiscal stimulus spending by the U.S. government.