NEW YORK CITY, RAW – The S&P 500 is subdued, with investors holding off big bets ahead of the earnings season that is expected to throw light on the health of US corporations and the country’s economy.
General Motors Co jumped 4.0 per cent after Chief Executive Mary Barra outlined plans for its first BrightDrop electric commercial vans to be delivered to FedEx by year-end.
High-flying shares of Tesla Inc added another 3.0 per cent.
Five of the 11 major S&P sectors were trading higher with energy stocks rising more than 3.0 per cent, tracking higher crude prices.
Rate-sensitive banks climbed 1.2 per cent as benchmark US Treasury yields reached their highest levels since March.
Hopes of a big boost to public spending and speedy rollout of vaccines under a Democratic-led US Congress have pushed Wall Street to record highs, with growth-linked financial, industrial and energy stocks lifting the market higher.
“On an average, markets look 3-6 months into the future about what environment we are likely to be dealing with, allowing it to push back on events in Washington last week and the surge in the COVID-19 cases,” said Matt Stucky, portfolio manager, equities, at Northwestern Mutual Wealth Management Company in Milwaukee, Wisconsin.
“There is a lot of bright news on the horizon on vaccine rollouts and a likelihood of more fiscal stimulus in Washington.”
In the previous session, the three main indexes had ended below their all-time highs, as investors worried that attempts to impeach President Donald Trump could delay the Joe Biden administration’s first moves on stimulus, spurring some profit-taking on the past month’s gains.
Democrats will give Trump one last chance on Tuesday to leave office days before his term expires or face an unprecedented second impeachment over his supporters’ storming of the US Capitol on January 6.
“Even if (additional stimulus) is delayed, it’s going to be a matter of days, maybe weeks, not months. The question is the shape and form of it,” said Keith Buchanan, portfolio manager at GlobAlt in Atlanta.
In early trading, the Dow Jones Industrial Average rose 11.88 points, or 0.04 per cent, to 31,020.57, the S&P 500 gained 2.33 points, or 0.06 per cent, to 3,801.94 and the Nasdaq Composite gained 27.57 points, or 0.21 per cent, to 13,064.00.
The small-cap Russell 2000 index gained about 1.0 per cent.
Fourth-quarter earnings will take centre stage starting on Friday, with results from JPMorgan, Citigroup and other big banks launching the reporting season.
Earnings for S&P 500 companies are expected to have dropped 9.8 per cent year-over-year in the final quarter of 2020, according to IBES data from Refinitiv, but they are expected to rebound in 2021, with a gain of 16.4 per cent projected for the first quarter.
Albertsons Cos Inc rose 2.1 per cent after the grocer reported quarterly sales above estimates as consumers wary of rising coronavirus cases stocked their pantries and cooked more at home.
Advancing issues outnumbered decliners by a 1.6-to-1 ratio on the NYSE and by a 1.9-to-1 ratio on the Nasdaq.
The S&P 500 posted 57 new 52-week highs and no new low while the Nasdaq recorded 233 new highs and eight new lows.