S&P 500 rises slightly and makes another attempt at new record, but Dow falls

The S&P 500 rose slightly on Monday as the broader market index tried to build on last week’s gain and attempted to break its Feb. 19 record high. 

The index gained 0.3%. The Nasdaq Composite advanced 0.7%. The Dow Jones Industrial Average lagged, falling 68 points, or about 0.3%.

Shares of Alphabet and Microsoft all rose at least 0.3% to lead the Nasdaq higher. Amazon, meanwhile, gained 0.4% after Reuters reported — citing sources — the e-commerce giant wants a minority stake in cloud company Rackspace Technology. CNBC confirmed the report through a source. Shares of Rackspace advanced more than 13% on the news. 

Consumer discretionary was the best-performing sector in the S&P 500, rising 0.8%. The S&P 500 materials sector gained 0.6% as miners Newmont and Freeport-McMoRan each gained more than 1%. Those gains came after Barrick Gold shot up 10% following Berkshire Hathaway disclosing a stake in the company

Despite those gains, the S&P 500 struggled to stay above its record closing high of 3,386.15. The index also flirted with that level for most of last week. 

“The S&P 500 is overbought into key resistance and up against seasonal headwinds,” Ari Wald, head of technical analysis at Oppenheimer, said in a note to clients. But should the market “consolidate from here, we’ll be monitoring for an accumulation of cyclical equities to confirm what we expect to be a breakout to a new high.”

Wall Street also grappled with lingering concerns over stalled coronavirus stimulus negotiations and simmering U.S.-China tensions.

Both Democrats and Republicans have indicated they are at a stalemate over a new stimulus package. Democrats have proposed to send more than $900 billion to states and municipalities in one bill. A counteroffer from the GOP did not include any additional aid for states and local governments.

On Friday, President Donald Trump tweeted: “I am ready to send more money to States and Local governments to save jobs for Police, Fire Fighters, First Responders, and Teachers. DEMOCRATS ARE HOLDING THIS UP!”

House Speaker Nancy Pelosi, D-Calif., said on Sunday she would call the House back into session to address funding for the U.S. Postal Service.

“The lack of a stimulus package is rightly causing some concern” in the market, said Liz Ann Sonders, chief investment strategist at Charles Schwab. “During the recovery phase, there was a greater boost to consumption from the unemployed cohort than there was from the employed cohort.”

“The stimulus checks that were received were put to work in the economy and consumption among the unemployed cohort went back to pre-pandemic levels, whereas the employed cohort’s consumption remains below those levels,” Sonders said. 

On the U.S.-China front, Trump issued an executive order on Friday forcing ByteDance to sell or spin off its U.S. TikTok business in 90 days. Trump cited “credible evidence” that ByteDance “might take action that threatens to impair the national security of the United States.”

Trump’s order came as the relationship between both countries continues to deteriorate. The U.S. has criticized China over its initial handling of the coronavirus outbreak.

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