NEW YORK: The S&P 500 edged higher on Tuesday, as investors rotated into economically sensitive cyclical stocks, optimistic that Washington will deliver a new round of stimulus to sustain the US economic recovery from a pandemic-induced recession.
Financial, industrial and energy stocks gave the biggest boosts to the bellwether S&P 500 and blue-chip Dow as investors pivoted back to cyclicals. The march upward lost steam late in the session, and a drop in tech shares pulled the Nasdaq lower.
The S&P 500 has moved into positive territory year-to-date, up 0.8%. The Nasdaq has gained 19% since Jan. 1, while the Dow remains down 6%.
The S&P 500 is now within 4% of its record closing high reached late in February.
The Dow Jones Industrial Average rose 159.53 points, or 0.6%, to 26,840.4, the S&P 500 gained 5.46 points, or 0.17%, to 3,257.3 and the Nasdaq Composite dropped 86.73 points, or 0.81%, to 10,680.36.
Of the 11 major sectors in the S&P 500, seven ended the session in the black.
Energy companies rose 6.2%, the largest daily jump since June 5, as crude prices climbed amid signs of rebounding demand.
Second-quarter reporting season rolled on, with 58 constituents of the S&P 500 having reported. Of those, 77.6% have come in above consensus, according to Refinitiv data.
But expectations have set a low bar. Analysts now see aggregate S&P 500 earnings for the April to June period having declined by 41.8% year-on-year, per Refinitiv. Coca-cola Co shares gained 2.3% after the beverage maker beat earnings estimates and said demand is improving.
Defense industrial Lockheed Martin Corp topped quarterly consensus estimates and raised its full-year profit and revenue estimates, sending its shares up 2.6%. Tesla Inc fell 4.5%, retreating from Monday's record closing high after JPMorgan Chase downgraded the electric car maker's stock to "market perform." Advancing issues outnumbered declining ones on the NYSE by a 3.26-to-1 ratio; on Nasdaq, a 1.58-to-1 ratio favoured advancers.
The S&P 500 posted 44 new 52-week highs and no new lows; the Nasdaq Composite recorded 126 new highs and 14 new lows. Volume on US exchanges was 11.82 billion shares, compared with the 11.37 billion average for the full session over the last 20 trading days.
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