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Nasdaq Hits Yet Another High on First Day of Impeachment Trial

2021-2-10 13:15:48 Viewers:

Nasdaq Hits Yet Another High on First Day of Impeachment Trial

By Nicholas Jasinski, Jack Denton, and Jacob Sonenshine

Updated Feb. 9, 2021 4:28 pm ET / Original Feb. 9, 2021 6:08 am ET

Oil prices are back at pre-pandemic levels.

Daniel Acker/Bloomberg

Major U.S. stock indexes hovered around break-even on Tuesday, before closing mixed on the day but near their record highs. The price of crude oil, meanwhile, held at levels not seen since before the onset of the Covid-19 pandemic.

The Dow Jones Industrial Average closed essentially flat on Tuesday, down 9.9 points or just 0.03%. The S&P 500 slipped about 0.1%, while the Nasdaq Composite rose 0.1% and the Russell 2000 closed up 0.4%—both to all-time highs.

Each index is up at least 5% so far for the month of February, led by small caps’ nearly 11% gain. Declining new Covid-19 cases and hospitalizations, better-than-expected earnings reports, and the impending fiscal stimulus package have been behind the recent rally.

Former President Donald Trump’s impeachment trial began in the Senate on Tuesday. That will dominate news coverage, but more meaningful for the market will be Senate Democrats’ final plans for massive fiscal stimulus to boost the pandemic-hit economy. The bill appears likely to be pushed through using a process called reconciliation, which requires only a simple majority to pass and thereby no Republican votes.

“In terms of equities, the ‘three stanchions’ of the rally (stimulus, earnings, and vaccines) are still placing upward pressure on prices, with reflation areas of the market such as energy and [materials] continuing to outperform,” said Stephen Innes, a market strategist at Axi.

In Asia, Tokyo’s Nikkei 225 ticked up 0.4%, while Hong Kong’s Hang Seng rose 0.5% and the Shanghai Composite Index surged 2%. The FTSE 100 in London and the CAC 40 in Paris both added about 0.1% while Frankfurt’s DAX closed 0.3% lower.

Asian markets were boosted on the tails of another big day on Wall Street on Monday, helping push the MSCI World Index to an all-time high. Investor sentiment was cooler in Europe, where markets dipped below flat as concerns abound over the Covid-19 vaccine rollout and challenges posed by new variants of the coronavirus that causes the disease.

The yield on the 10-year U.S. Treasury note fell then rebounded to hold steady just below 1.16%, while the U.S. Dollar Index declined 0.5%, to about 90.5.

“Broader macro risk is trading mixed this morning, with yields pulling back from recent highs, while a weaker U.S. dollar continues to push oil and metals higher ahead of Chinese New Year,” Innes added.

Crude oil prices are back at levels last seen in January 2020. Brent—the international benchmark—broke the $60 per barrel threshold on Monday, before adding another 0.9% on Tuesday, to $61.09 on Tuesday. WTI crude, the U.S. price, rose 0.7% to $58.36.

Energy stocks pulled back, after the S&P 500 sector jumped 4.2% on Monday—its sixth-straight gain.

Total (ticker: TOT) gave back an earlier gain following upbeat quarterly results. The French oil major said earnings largely rebounded in the fourth quarter of 2020 as oil prices stabilized, capping a turbulent year with a $7.2 billion loss. The stock was down 3%.

Bitcoin surged above $47,000 to fresh highs on Tuesday in the crypto asset’s most recent rally. The latest surge follows news that electric-vehicle maker Tesla (TSLA) had bought $1.5 billion worth of Bitcoin and may accept it in the future as payment.

Baidu  (BIDU) rose 6.7% after China Renaissance upgraded the stock to Buy from Hold.

Chipotle  (CMG) rose 3.1% after Northcoast upgraded the stock to Buy from Neutral.

Ford  (F) rose 3.3% after Argus upgraded the stock to Buy from Hold.

KB Home  (KBH) fell 2.7% after Seaport Global Securities downgraded the stock to Neutral from Buy.

Tilray (TLRY) stock surged 40.7% after it secured a deal with a U.K. distributor to sell medical marijuana products in the country.