Stocks slipped Tuesday as equity investors paused after a six-day winning streak.
The S&P 500 fell about 0.2% shortly after market open, and the Dow shed about 100 points, or 0.3%. The Nasdaq fluctuated between small gains and losses. A day earlier, the S&P 500 rose to a fresh record intraday and closing high. The Dow posted its best start to a February since 1931 with a month-to-date rise of 4.7%.
Bitcoin prices (BTC-USD) surged more than 18% overnight to close in on $48,000, adding to a record-setting rally triggered after Tesla (TSLA) disclosed it had purchased $1.5 billion worth of the cryptocurrency earlier this week.
Prospects for more stimulus out of Washington have remained a major driver of equities over the past week. Congressional committees this week are set to work out details of the legislation for another virus-relief package, which is expected to include another round of $1,400 stimulus checks, hundreds of billions of dollars in state and local aid and an extension to enhanced federal unemployment benefits beyond their current March end date. Goldman Sachs economists increased their 2021 and 2022 annual U.S. gross domestic product (GDP) growth forecasts by 0.2 percentage points each to 6.8% and 4.5%, respectively, amid their expectations for an eventual stimulus package worth $1.5 trillion, according to a note Monday.
But even in absence of additional stimulus, corporate America has already been showing signs of a stronger-than-expected rebound, with fourth-quarter earnings results blowing past estimates. More than three-quarters of S&P 500 companies have so far reported earnings results, and 66% have beaten expectations for both sales and profit, according to a Bank of America analysis.
“Corporate earnings have defied a shrinking economy: 4Q EPS [earnings per share] for the S&P 500 is now up 0.3% YoY vs. -2.5% YoY in GDP,” Bank of America strategist Savita Subramanian wrote in a note Monday. Heading into fourth-quarter earnings season, consensus analysts expected that S&P 500 companies would, in aggregate, post another earnings decline.
Companies including Twitter (TWTR) and Lyft (LYFT) are among the companies to report quarterly earnings results after market close on Tuesday.
“There’s a lot of tailwinds for the markets right now. One is the so-called stimulus package … it is relief, and it will provide a sugar high, so it’s good for the markets in the near-term,” Greg Swenson, Brigg Macadam founding partner, told Yahoo Finance.
“But you’ve also got earnings [that] have been fantastic, and you seem to see consistent revisions upward on earnings and good results” he added. “You’ve got pent-up demand – I think that’s the most important thing to consider. You’ve had a massive increase in the savings rate since the beginning of the pandemic. So you’ve got a lot of consumer pent-up demand, a lot of savings that’s sitting on the sidelines waiting to either buy stocks … but also just get back to work in the private economy.”
10:00 a.m. ET: Job openings unexpectedly increased in December, reaching 5-month high: JOLTS
The number of U.S. job openings unexpectedly increased to the highest level since July in December, and openings for November were upwardly revised.
Job openings in December totaled 6.645 million, the U.S. Labor Department said Tuesday. This beat expectations for 6.4 million job openings, according to Bloomberg consensus date. Job openings had totaled 6.572 million in November.
By industry, job openings in professional and business service industries increased by the most at 296,000. Job openings notably decreased in state and local government, in the arts and in nondurable goods manufacturing.
9:30 a.m. ET: Stocks open slightly lower
The three major indexes opened lower Tuesday, giving back some gains after hitting record highs a day earlier. The S&P 500 ticked down about 0.2% but buoyed over 3,900. The Dow shed about 100 points, or 0.3%, as shares of Disney, Visa and Boeing dipped. The Nasdaq outperformed, ticking just 0.1% below the flat line.
7:23 a.m. ET Tuesday: Stock futures pull back slightly from record levels
Here’s where markets were trading Tuesday morning:
S&P 500 futures (ES=F): 3,902.5, down 5.5 points or 0.14%
Dow futures (YM=F): 31,207.00, down 61 points or 0.2%
Nasdaq futures (NQ=F): 13,667.75, down 15.25 points or 0.11%
Crude (CL=F): -$0.06 (-0.1%) to $57.91 a barrel
Gold (GC=F): +$10.10 (+0.55%) to $1,844.30 per ounce
10-year Treasury (^TNX): -0.5 bps to yield 1.155%
6:05 p.m. ET Monday: Stock futures hold near record levels
Here’s where markets were trading Monday evening as overnight trading kicked off:
S&P 500 futures (ES=F): 3,908.75, up 0.75 points or 0.02%
Dow futures (YM=F): 31,285.00, up 17 points or 0.05%
Nasdaq futures (NQ=F): 13,677.5, down 5.5 points or 0.04%
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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