In this photo provided by the New York Stock Exchange, traders work on the floor, Tuesday, Feb. 9, 2021. Stocks were slightly lower in early trading on Tuesday, after the major stock market indexes hit record highs the day before. Investors continue to keep their eyes on Washington, where it appears Democrats plan to move ahead without Republican help on a major stimulus bill for the economy. (Courtney Crow/New York Stock Exchange via AP)
By Damian J. Troise and Alex Veiga
The major U.S. stocks capped a listless day of trading Tuesday with an uneven finish that snapped a six-day winning streak for the S&P 500 even as the Nasdaq set another all-time high.
A late fade pulled the S&P 500 down 0.1%, just below its record high set a day earlier. The benchmark index closed with a nearly even split between gainers and losers. A mix of companies that deal with consumer services and products were the biggest drag on the broader market, outweighing gains in communications, industrial and health care stocks.
A slight pullback after six straight days of gains is not uncommon, as investors pause during a rally to reassess and wait for more economic data to see where the market goes next.
Investors continued to monitor the action in Washington, where it appears Democrats plan to move ahead without Republican help on a major stimulus bill for the economy.
“It seems like fiscal stimulus will pass through reconciliation and the result will be one that is larger than was thought probably two or three weeks ago," said Keith Buchanan, senior portfolio manager at Globalt Investments.
The S&P 500 index slipped 4.36 points to 3,911.23. The Dow Jones Industrial Average dropped 9.93 points, or less than 0.1%, to 31,375.83. The Nasdaq rose 20.06 points, or 0.1%, to 14,007.70, its fourth straight gain. The Russell 2000 index of small company stocks rose 9.24 points, or 0.4%, to 2,299. The four indexes set all-time highs on Monday.
Stocks have been moving steadily higher for several days as Wall Street becomes more optimistic that the worst parts of the economic impact of the coronavirus pandemic might be in the rearview mirror. Vaccine rollouts continue both in the U.S. and globally, with the U.S. administrating hundreds of thousands of doses per day.
“The vaccinations have outpaced the virus and that becomes part of what’s playing into the optimism in the market,” Buchanan said. “It makes for an environment where it’s getting back to some sense of normality.”
Washington is preparing to go big for its next round of economic stimulus to support struggling Americans and businesses. Democrats have rallied around President Joe Biden's $1.9 trillion stimulus plan, which will include one-time payments to Americans plus a likely increase in the federal minimum wage to $15 an hour.
Expectations for another financial boost for the economy have helped keep investors in a buying mood.
The market's strong start to February and the strength in shares of companies that rely on consumer spending "is an indicator of the optimism creeping higher and the assumption that consumers in the U.S. will get a larger check perhaps than we thought three or four weeks ago,” Buchanan said.
Several companies made big moves after reporting their latest quarterly results Tuesday. Hanesbrands soared 24.9% for the biggest gain in the S&P 500 after reporting earnings that came in well ahead of what analysts were expecting.
Mobile games developer Glu Mobile vaulted 34.9% after it agreed to be acquired by Electronic Arts in a deal valued at $2.1 billion. Shares in Electronic Arts, maker of “Medal of Honor” and other video games, rose 2.6%.
Shares of GameStop and AMC Entertainment continue to be volatile, as online investors remain in a tug-of-war with Wall Street institutional investors over the struggling companies' values. GameStop shares fell 16.1% and AMC lost 11%.
Traders in cryptocurrencies continued to push up the price of bitcoin. It rose 7.3% to $47,184, according to the tracking site CoinDesk. Bitcoin futures on the Chicago Mercantile Exchange climbed 6.6% to $47,700. The futures allow investors to make bets on the future price of the digital currency.
Treasury yields were mostly higher. The yield on the 10-year Treasury note rose to 1.16% from 1.14% late Monday.
Stocks closed lower Tuesday with investors initiating a broad sell-off, leading the Dow to have its worst day of 2022 so far as it had its biggest decline since November. Investors are eyeing treasury yields, which have surged to pre-pandemic highs, as well as looking ahead to the Federal Reserve's path forward when it comes to raising interest rates. Meanwhile, as earnings season kicks off, Goldman Sachs shares are under pressure after a lackluster earnings report. Goldman is weighing on bank stocks as a whole. Jeff Buchbinder, Equity Strategist for LPL Financial, joins Cheddar News' Closing Bell to discuss today's close, why treasury yields are ticking higher toward pre-pandemic levels, big bank earnings reports, and more.
Mike McGlone, Senior Commodity Strategist at Bloomberg Intelligence, joins Cheddar News' Closing Bell, where he says he believes we'll eventually see Bitcoin reach the $100,000 mark despite its recent struggles, and explains why Bitcoin will be less volatile than the Nasdaq.
Food waste is a major contributor to greenhouse gas emissions in the United States. Strella Biotechnology is trying to solve the problem by introducing new technology to a business that's been around for generations -- farming. The 24-year-old CEO created hi-tech sensors that interpret the shelf life of produce and alert farmers when fruits and vegetables are ready to be sent to supermarkets. The company says the process can help farmers make money, reduce food waste and increase the quality of produce. Strella Biotechnology's co-founder and CEO Katherine Sizov and co-founder and COO Jay Jordan joined Cheddar Climate to discuss.
Adele Shraiman, Campaign Representative for the Sierra Club’s Fossil Free Finance Campaign, joins Cheddar Climate, where she explains how Wall Street and climate change are related. She also elaborates on how decisions made by financial institutions are actually hurting the ability to reduce carbon emissions.
Hugh Odom, founder and president of Vertical Consultants, shared his expertise on telecommunications with Cheddar on the safety issue raised about 5G deployment by airlines. The installation was partially delayed again on Tuesday as the airlines warned of potentially catastrophic delays in a letter to the Biden administration. Later, both Verizon and AT&T relented and put a pause on some of the implementations. "The first thing the Biden administration needs to do is get everybody in the room and say, look, aviation industry, identify the problem — wireless industry, come up with a solution," said Odom.
Microsoft announced on Tuesday it's acquiring video game publisher Activision Blizzard for nearly $70 billion in cash, a company that's is known for big titles like "Call of Duty" and "World of Warcraft." Lyron Bentovim, Glimpse Group president and CEO, and Dan Ives, managing director and senior equity research analyst at Wedbush, sat down to talk about what Ives called "a shot across the bow" towards the competition. "This is pretty exciting for the industry as a whole because another one of the big players is coming to the metaverse," said Bentovim. "Microsoft using metaverse in the quote from their CEO in their press release shows the importance of this deal."
Netflix may not be staying at the top of the streaming wars, according to some wary investors, as competition heats up and it raises prices yet again. Tuna Amobi, director and senior equity analyst at CFRA Research, spoke with Cheddar about what investors should be considering should they stick with the streaming pioneer or drop the investment. "I think it's always mostly about the subscriber growth for the Q4, which is going to be an indicator of how the company has been navigating the speed bumps that we saw early in the year," said Amobi.
