Benchmarks closed in the positive territory on Tuesday as investors remained optimistic on possible fiscal stimulus and vaccine roll out. However, traders keep a close watch on political turmoil with attempts to impeach President Trump.
The Dow Jones Industrial Average (DJI) rose 60 points, or 0.2%, to close at 31,068.69 and the S&P 500 added 1.58 points, or 0.04%, to close at 3,801.19. The Nasdaq Composite Index closed at 13,072.43, adding 26.03 points, or 0.3%. The fear-gauge CBOE Volatility Index (VIX) decreased 3.1%, to close at 23.33. Advancing issues outnumbered declining ones for 1.6-to-1 ratio on the NYSE and a 1.9-to-1 ratio on the Nasdaq favored advancers.
How Did the Benchmarks Perform?
The S&P 500 closed nearly unchanged on Tuesday, six of the 11 major sectors of the broader index closed in the positive territory. The energy sector emerged as the biggest gainer closing 3.5% higher for the session. The blue-chip Dow was powered predominantly by significant rise in energy and bank shares. Among the biggest winners of the Dow were Intel Corporation INTC and The Travelers Companies, Inc. TRV that closed 3.3% and 2.2% higher, respectively.
Though the Nasdaq closed in the green on Tuesday, losses from major tech players restricted its gain. Among the biggest gainers of the tech-laden index were Baidu, Inc. BIDU, DocuSign, Inc. DOCU and Moderna, Inc. MRNA that closed 9.1%, 9% and 6.2% higher, respectively, for the session. Moderna carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Overall, the S&P 500 posted 57 new 52-week highs and no new lows, while the Nasdaq Composite recorded 233 new highs and eight new lows.
Higher Rates Boost Bankers
On Tuesday, the benchmark 10-year note yield shortly traded at 1.187% which is its highest level since March 2020, and finally closed at 1.13%. The 30-year bond rate climbed to 1.88%, which is also a March 2020 high. Additionally, fourth-quarter earnings are scheduled to begin on Friday, results from major banks are expected to flag off the reporting season and will draw a clear picture of the health of US economy. The aforementioned factors helped share of rate-sensitive stocks closed higher on Tuesday. Shares of The Goldman Sachs Group, Inc. GS rose 2.9% that helped the Dow edge higher. While, other big banks like JPMorgan Chase & Co. JPM and Bank of America Corporation BAC ended 1.6% and 1.8% higher, respectively.
Trader remained optimistic that Democrats will be providing additional fiscal stimulus to the pandemic struck economy and rates have been rising since Democrats secured majorities in both the House and Senate. Last week, President-elect Joe Biden had promised a fresh stimulus, which will be “in the trillions of dollars.” On the other hand, political turmoil in the Capitol has pushed House Democrats to introduce an article of impeachment on Monday against President Trump for inciting the attack. The house reported that it will give Trump one last chance on Tuesday to leave office before his term expires on Jan 20 or face an unprecedented second impeachment. The House of Representatives plans to vote on Wednesday on the articles of impeachment, unless Trump resigns or vice-president Mike Pence moves to remove him under a provision in the US constitution.
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JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report
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