Dow futures rise 120 points as stocks look set to resume gains following a pause in the rally
U.S. stock futures bounced on Wednesday a day after a pause in the market’s rally to records.
Dow Jones Industrial average futures rose 120 points, or 0.4%. The move indicated an opening gain of about 117 points. Futures for the S&P 500 added 0.2%. Nasdaq 100 futures were 0.1% higher.
Here’s what got futures moving in the positive direction Wednesday morning.
On Tuesday, the Dow Jones Industrial Average fell more than 167 points, dragged down by Walgreens, Home Depot and Walmart. The S&P 500 lost 0.5%. Tuesday’s session was the first time in three days the Dow and S&P 500 fell, following their record closes on Monday.
The Nasdaq Composite was the relative outperformer, dipping just 0.2%. Tesla shares popped more than 8% after S&P Dow Jones Indices said that the electric vehicle company will join the S&P 500.
Small-caps continued to outperform on Tuesday with the Russell 2000 gaining 0.37% to close at another record.
Stocks are having a strong month on the back of positive news from two U.S. drugmakers about successful Covid-19 vaccines. The Dow is up more than 12% and the S&P 500 is up more than 10% in November. The Nasdaq Composite is up more than 9%, lagging as investors ditch technology shares of cyclical plays.
“For the most part, the economy has been recovering faster than many expected, as consumer spending has held up quite well throughout the crisis,” Charlie Ripley, senior investment strategist for Allianz Investment Management, said in a note. “Much of this can be seen through consumer spending habits, where the pandemic has caused consumers to shift spending away from service-oriented products and into to more goods-related products.”
“While this has been beneficial to the economy overall, it has created a bifurcated recovery, as some sectors of the economy continue to be extremely depressed,” he added.
Equities are rising amid a backdrop of worsening Covid-19 infections in the U.S. The U.S. seven-day average of daily new Covid-19 infections surpassed 150,000 for the first time on Monday, according to a CNBC analysis of Johns Hopkins data. Retail sales came in lower-than-expected for October as millions of Americans lost their unemployment benefits amid the surge in cases.
Lowe’s shares dropped 6% after the home improvement retailer reported third-quarter earnings and a profit outlook slightly short of estimates.
A slew of other retailers report quarterly earnings on Wednesday, with chipmaker Nvidia, Copa Holdings and L Brands set to release earnings following Wednesday’s session.
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