U.S. stock futures traded near the flatline early Tuesday morning after the major averages logged in sharp gains to start the new month on Monday.
Dow Jones Industrial Average futures indicated a loss of fewer than 50 points at the open. S&P 500 traded in negative territory while the Nasdaq 100 futures posted marginally positive moves.
The Dow closed Monday’s session up more than 200 points, or 0.9%. The S&P 500 rallied to its highest level since Feb. 21 and the Nasdaq closed at a record high. The S&P 500 also ended the session less than 3% below the intraday record set on Feb. 19.
Those gains came after Microsoft and Apple powered the S&P 500 tech sector to an all-time high, rising 5.6% and 2.5%, respectively. Tech has been by far the best-performing sector this year, rising more than 23% in that time period.
“Tech stocks have captured considerable attention for their gaudy, relative total return performance, but what is less appreciated is how ‘consistent’ they have been,” Jim Paulsen, chief investment strategist at The Leuthold Group, in a note to clients. Paulsen pointed out the S&P 500 has outpaced the broader market 57% of the time in 2020.
“What valuation is warranted by a sector whose business grows faster for reasons that are less dependent on overall economic conditions, and whose members generate remarkable excess returns with superior frequency, compared to any other sector in the stock market?”
Sentiment on Wall Street also got a boost after Eli Lilly started a late-stage trial for its coronavirus antibody treatment. The trial will explore whether LY-CoV555 can prevent the virus from spreading between nursing home residents and staffers.
To be sure, investors continue to monitor negotiations over a new stimulus package as lawmakers struggle to make progress. House Speaker Nancy Pelosi said she, Senate Minority Leader Chuck Schumer and White House chief of staff Mark Meadows held “productive” discussions on Monday, but added there are several issues still outstanding.
“We are moving down the track,” Pelosi said, but “still have our differences.”
Both sides have indicated they agree on another $1,200 stimulus check, but remain deadlocked on additional unemployment assistance.
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