NEW YORK: The Dow and the S&P 500 hit record highs on Tuesday as worries about the Omicron variant of the coronavirus subsided and financial stocks gained, while Ford jumped on an upbeat forecast for electric pickup production.
Equity markets across the globe bounced for the second straight day of trading in 2022, with the World Health Organization saying more evidence is emerging that the coronavirus variant is affecting the upper respiratory tract, causing milder symptoms than previous variants.
Nine of the 11 major S&P sectors advanced in early trading. Value-oriented and cyclicals such as energy and financials led the pack, up about 2% each. The healthcare sector underperformed.
Travel stocks advanced, with the S&P 1500 airlines index rising 1.9% and cruise operators Norwegian Cruise Line Holdings, Royal Caribbean and Carnival Corp adding between 0.9% and 2.1%.
Big technology stocks that led gains in the previous session edged higher. Apple Inc, Tesla Inc, Meta Platforms Inc and Alphabet Inc rose between 0.1% and 1.2%.
The S&P 500 banks sector added 2.7%, while the broader value index was up 0.7% to hit a record high.
“I think it’s also sort of posturing and positioning by some for the beginning of the new year. People look at the beginning of the new year as a way to reallocate assets in their portfolio to move money around,” said Robert Pavlik, senior portfolio manager at Dakota Wealth Management.
Pavlik said value trade could lead markets in the first half of this year on expectations of interest rate hikes by the Federal Reserve.
The US central bank in December said it would be ending its pandemic-era bond buying in 2022, signaling at least three rate hikes for the year. Minutes from the meeting is expected to be released on Wednesday.
Ford Motor Co added 6.6% after the automaker said it will nearly double annual production capacity for its red-hot F-150 Lightning electric pickup to 150,000 vehicles.
General Electric Co rose 2.7% after Credit Suisse upgraded the conglomerate’s stock to “outperform” from “neutral”.
Foot Locker Inc slipped 3.4% after J.P. Morgan downgraded the sports and footwear retailer’s stock to “underweight” from “neutral”.
At 9:49 a.m. ET, the Dow Jones Industrial Average was up 218.76 points, or 0.60%, at 36,803.82, the S&P 500 was up 18.80 points, or 0.39%, at 4,815.36, and the Nasdaq Composite was up 2.60 points, or 0.02%, at 15,835.40.
Data showed US manufacturing slowed in December amid some cooling in demand for goods, but supply constraints are starting to ease and a measure of prices paid for inputs by factories fell by the most since early 2020 when the pandemic disrupted economic activity.
Advancing issues outnumbered decliners by a 1.96-to-1 ratio on the NYSE and by a 1.25-to-1 ratio on the Nasdaq.
The S&P index recorded 31 new 52-week highs and no new low, while the Nasdaq recorded 49 new highs and nine new lows.
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