The Dow Jones Industrial Average rose on Tuesday, building on the previous session’s strong gains, as lawmakers tried to make inroads on a new coronavirus stimulus package.
The Dow gained 90 points, or 0.3%, while the S&P 500 hovered around the flatline. The Nasdaq Composite, up more than 21% in 2020, retreated 0.1% in afternoon trading and remained on track for its first negative day in five.
Tuesday’s moves came as lawmakers struggle to make inroads on a new coronavirus stimulus package.
House Speaker Nancy Pelosi told Fox News on Tuesday she doesn’t think a deal will be reached this week. Pelosi made that comment after 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.
Both sides have indicated they agree on another $1,200 stimulus check, but remain deadlocked on additional unemployment assistance.
“In our opinion, Congress will muster the fortitude to deliver near-term stimulus support,” said Darrell Cronk, president of Wells Fargo Investment Management, in a note. “However, a greater challenge comes in 2021 when this year’s extraordinary fiscal stimulus programs fade.”
Big Tech, which has led the major market indexes for much of the past week, traded mixed on Tuesday. Apple, which at one point Tuesday was among the best performers in the Dow, pared gains to trade up 0.2%. Netflix, meanwhile, gained 1.3% as the rest of Big Tech struggled. Facebook and Alphabet lost 1.6% and 1%, respectively.
Energy, staples and materials were the best-performing sectors in the S&P 500, rising more than 1% each. Those gains were offset by declines health care and financials.
Wall Street was coming off a strong session, with the Dow rallying more than 200 points on Monday. 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.
“Tech stocks have captured considerable attention for their gaudy, relative total return performance, but what is less appreciated is how ‘consistent’ they have been,” said 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?”
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