Stimulus jitters dent Wall St's early gains; Nasdaq, S&P at records

By Chuck Mikolajczak NEW YORK (Reuters) - Major U.S.

Reuters January 26, 2021 04:05:23 IST
Stimulus jitters dent Wall St's early gains; Nasdaq, S&P at records

Stimulus jitters dent Wall Sts early gains Nasdaq SP at records

By Chuck Mikolajczak

NEW YORK (Reuters) - Major U.S. averages on Monday closed off their best levels of the day, although the S&P and Nasdaq still finished at record levels, as concerns over the timing and scope of fiscal stimulus dented optimism at the start of a week of earning reports from mega-cap companies.

Investors turned their focus to the U.S. Senate, which is aiming to pass COVID-19 relief legislation before former President Donald Trump's impeachment trial begins in early February. Stocks moved lower after Democratic Majority Leader Chuck Schumer cautioned a stimulus bill may not pass for four to six weeks.

Officials in President Joe Biden's administration are trying to head off Republican concerns that his $1.9 trillion pandemic relief proposal is too expensive.

"What is really underpinning the market is the stimulus – that is what it is all about," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

"The market loves money, whether it is fiscal or monetary, and right now you have both. So if you do pull the rug out from stimulus plans, that might be a problem, but they aren't going to do that."

The Dow Jones Industrial Average fell 36.98 points, or 0.12%, to 30,960, the S&P 500 gained 13.89 points, or 0.36%, to 3,855.36 and the Nasdaq Composite added 92.93 points, or 0.69%, to 13,635.99.

After climbing as much as 1.4% to an intraday record, the Nasdaq gave back a good portion of its gains, with the so-called "stay-at-home" winners, including Microsoft Corp, Facebook Inc and Apple Inc, rising after upbeat results from Netflix Inc last week.

Still, a late push higher sent both the S&P and Nasdaq to closing records, after Biden revealed his plan to boost domestic manufacturing through U.S. government purchases.

Microsoft, scheduled to report results on Tuesday, rose 1.58% as Wedbush raised its price target on the software maker's stock on expectations of further growth in its cloud business for 2021.

The S&P 500 sectors housing large-cap growth stocks, including technology and communication services closed at record levels.

Wall Street's main indexes hit all-time highs last week on optimism for a more complete economic reopening and smooth vaccine distribution across the country, which is suffering from more than 175,000 new COVID-19 cases daily with millions out of work.

Earlier on Monday, drugmaker Merck & Co said it would stop development of its two COVID-19 vaccines. Its shares managed to shrug off early losses and ended the session up 0.21%.

Gamestop shares closed 18.12% higher in volatile trading in a session that saw the video game retailer climb as high as $159.18 and drop as low as $61.13 on the day as investors rushed to cover short bets.

Sectors that have performed well on hopes for an economic rebound, such as financials, energy and materials, led declines on Monday, while defensive utilities, consumer staples and real estate outperformed. Weakness in financial names such as Goldman Sachs and American Express served to keep the price-weighted Dow in negative territory.

Declining issues outnumbered advancing ones on the NYSE by a 1.33-to-1 ratio; on Nasdaq, a 1.12-to-1 ratio favored decliners.

The S&P 500 posted 28 new 52-week highs and no new lows; the Nasdaq Composite recorded 314 new highs and 4 new lows.

Volume on U.S. exchanges was 16.37 billion shares, compared with the 13.21 billion average for the full session over the last 20 trading days.

(Reporting by Chuck Mikolajczak; Editing by Dan Grebler)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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