Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

S&P Closes Above 3,900 for First Time on Strength in Energy, Financials

Published 02/08/2021, 03:48 PM
Updated 02/08/2021, 04:07 PM
© Reuters

© Reuters

By Yasin Ebrahim

Investing.com – The S&P ended above an unprecedented milestone to hit another all-time high Monday as both cyclicals and growth played a role in record-setting day for three major averages amid an improving Covid-19 backdrop and growing expectations for another round of fiscal stimulus. 

The S&P 500 was up 0.74% to 3,915.60, while the Dow Jones Industrial Average closed up 0.76%, or 237 points, and the Nasdaq Composite jumped 0.95%. All three major averages closed at all time highs. 

Energy led the gains in the broader market, underpinned by a more than one-year high on bets a pick up in the pace of vaccinations will lead to a strong reopening and boost energy demand.

Marathon Oil Corporation (NYSE:MRO), Apache Corporation (NASDAQ:APA) and Occidental Petroleum Corporation (NYSE:OXY) were up sharply, with the latter up about nearly 9%.

The energy sector was also supported by a rise in oil major Exxon Mobil (NYSE:XOM) on an upgrade from BNP Paris to neutral from underperforming, citing the company's planned reduction on fossil fuel spending.

Disney (NYSE:DIS), up 5%, was one the biggest contributors to the move higher in the Dow Jones as investors bet that a faster pace of vaccinations will lead to quicker reopening of the company's theme parks. The rally in Disney comes just days ahead of its quarterly earnings report later this week.     

Financials were also among the biggest sector gainers.

Citigroup (NYSE:C) and JPMorgan Chase (NYSE:JPM) added more than 1%, while Bank of America (NYSE:BAC) and Goldman Sachs Group (NYSE:GS) was up 2%. 

The move higher in cyclicals was also supported by falling Covid-19 cases and growing optimism that fiscal stimulus will be rolled out sooner rather than later.

The labor market is in a "deep hole," Treasury Secretary Janet Yellen said, citing the 779,000 unemployment claims filed last week. "We need a big package and we need to get this done quickly," she added in an interview with CNN.

In the U.S., the number of cases has slowed from 235,000 to 87,000 with now more than 42 million vaccine doses administered. Despite progress, however, President Biden warned the U.S. probably won't reach herd immunity before the fall,” Stifel said in a note.

Quarterly earnings, meanwhile, continued to surprise to the upside.

Hasbro (NASDAQ:HAS) fell 4% despite reporting fourth-quarter earnings that topped Wall Street estimates.

Hershey (NYSE:HSY) climbed 2% as a pandemic-led bump in sales helped the company deliver an earnings beat in the fourth quarter.

In tech, Apple (NASDAQ:AAPL) cut losses to end just above the flatline shrugging off media reports on Friday suggesting the tech company had paused its talks with Hyundai and Kia over plans to develop an electric vehicle.

Still, analysts on Wall Street say that it is matter of when not if the tech giant will make a foray into the electric vehicle industry.

"While the timing of an EV partnership with the likes of Hyundai, or another automaker, remains a key focus of the Street and EV industry over the coming months we assign a 85%+ chance that Apple will announce an EV partnership/collaboration over the next 3 to 6 months," Wedbush said in a note.

Amazon.com (NASDAQ:AMZN), meanwhile, closed down 1% as the company failed in its attempt to delay a vote from warehouse workers in Alabama to form a union. The ballot results are expected later this week.

Tesla (NASDAQ:TSLA) climbed 1% after announcing that it had invested $1.5 billion in Bitcoin. "We expect to begin accepting Bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis," Tesla said in the securities filing.

Bitcoin surged to record highs on the news as the move from Tesla supports the idea of companies investing in Bitcoin as a treasury asset and further endorses the crypto as an inflation hedge, according to David Wachsman, chief executive and Founder of Wachsman.

"The narrative of bitcoin as an inflation hedge continues to hold water among corporates and institutional investors, with prominent advocates for investing in Bitcoin as a Treasury asset, such as Microstrategy (NASDAQ:MSTR)'s Michael Saylor likely driving this move by Tesla" Wachsman said in an email. 

Latest comments

Everything goes up every year! insurance, utility bills, food, house, etc! so does stocks! no different!
FED behaves irresponsible = lathery equity bubble = inflation = richers property skyrockets = necessity becomes pricey = poor labors become more poor = nearsighted paradox
50% of 4000 is 2000
yeah
biden yellen and powell: make sure the poors stay poor
Yeah, it is late already, the economy is blossoming, new markets are being found, no company with a loss in the last 2 years, only successful companies and no bankruptcy was seen lately
ooh
Moratorium on foreclosures.... if I was a failing business I'd be pocketing as much cash as I could right before the bank came for the property...
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.