Stimulus nervousness affects early Wall Street earnings; Nasdaq, S&P at the records

NEW YORK (Reuters) – Monday’s major US averages closed their best levels of the day, although the S&P and Nasdaq still closed at record highs, as concerns about the timing and extent of the fiscal stimulus dented the optimism. start of a week of earnings reports from large-cap company.

Investors have focused on the United States Senate, which aims to pass COVID-19 relief legislation before former President Donald Trump’s impeachment trial begins in early February. Stocks moved lower after Democratic Majority Leader Chuck Schumer warned that a stimulus bill may not be passed for 4-6 weeks.

Officials in President Joe Biden’s administration are trying to avert Republican concerns that his $ 1.9 trillion pandemic relief proposal is too expensive.

“What really underlies the market is the stimulus, that’s what it is,” said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

“The market loves money, both fiscal and monetary, and right now you have both. So if you take out the carpet from stimulus plans, it could be a problem, but they won’t. “

The Dow Jones Industrial Average fell 36.98 points, or 0.12%, to 30,960, the S&P 500 gained 13.89 points, or 0.36%, to 3,855.36, and the Nasdaq Composite added 92. , 93 points, or 0.69%, at 13,635.99.

After climbing 1.4% to an intraday record, the Nasdaq returned a good chunk of its earnings, with so-called “stay-at-home” winners, including Microsoft Corp, Facebook Inc and Apple Inc, on the rise after optimistic results from Netflix Inc last week.

However, a late upward push sent both the S&P and Nasdaq to closing records, after Biden revealed his plan to boost domestic production through U.S. government purchases.

Microsoft, scheduled to report on Tuesday, was up 1.58% as Wedbush raised its price target on the software maker’s stock in anticipation of further growth of its cloud business by 2021.

Sectors of the S&P 500 hosting large-cap growth stocks, including technology and communications services, closed at record levels.

Major Wall Street Indices hit all-time highs last week on optimism for a more comprehensive economic reopening and regular vaccine distribution across the country, which is suffering. from more than 175,000 new COVID-19 cases a day with millions out of work.

On Monday, pharmaceutical manufacturer Merck & Co said it will halt development of its two COVID-19 vaccines. His stocks managed to shake off their early losses and ended the session up 0.21%.

Gamestop shares closed 18.12% higher in volatile trading in a session that saw the game retailer climb as high as $ 159.18 and fall as low as $ 61.13 on the day investors rushed to cover short bets.

Sectors that performed well in hopes of an economic rebound, such as financials, energy and materials, fell Monday, while defensive utilities, consumer staples and real estate outperformed. Weakness from financial names like Goldman Sachs and American Express has served to keep the price-weighted Dow in negative territory.

Falling issues outpaced those rising on the NYSE by a ratio of 1.33 to 1; on the Nasdaq, a 1.12 to 1 ratio favored decliners.

The S&P 500 made 28 new 52-week highs and no new lows; the Nasdaq Composite recorded 314 new highs and 4 new lows.

The volume on US exchanges was 16.37 billion shares, compared to an average of 13.21 billion for the entire session over the past 20 trading days.

Reporting by Chuck Mikolajczak; Editing by Dan Grebler