US Aug 10
The Dow and S&P 500 closed at records Tuesday, riding the wave of expectations for the further boost to the economy as the $1 trillion infrastructure bill passed a key hurdle.
The S&P 500 rose 0.1% to a closing record of 4,436.80. The Dow Jones Industrial Average climbed 0.5%, or 162 points to close at a record of 35,264.67. The Nasdaq was down 0.5%.
The infrastructure bill passed in the Senate 69-30 on Tuesday, and now heads to the House of Representatives for approval, though there is some uncertainty in the House.
Democrats are aiming to advance a much larger, approximately $3.5 trillion package, without Republican support, alongside the bipartisan infrastructure bill. The more ambitious plan would focus spending on human infrastructure that includes measures to improve health care and education.
Investor optimism over further spending on the economy paved the way for a lift off in economically sensitive sectors of the market including energy and industrials.
Energy stocks gained more than 1% to led the broader-market higher as oil prices rebounded from a drumming on Monday.
Still, some continued to caution on oil prices, pointing to the falling China demand as a headwind after a surge in Covid-19 cases led to renewed travel restrictions, stifling demand.
Treasury yields continued to advance, meanwhile, pushing banking stocks higher, with Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) up 2%.
Higher interest rates boost the return on interest that banks earn from their loan products, or net interest margin – the difference between the interest income generated by banks and the amount of interest paid out to depositors.
Rising yields, the enemy of growth stocks with high valuations, continued to weigh on tech.
Microsoft (NASDAQ:MSFT, Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB) and Amazon.com (NASDAQ:AMZN), and Google-parent Alphabet (NASDAQ:GOOGL) closed below the flatline.
On the earnings front, investors cheered mostly positive reports.
AMC Entertainment (NYSE:AMC) reported a narrower than expected quarterly loss late Monday, on better than expected revenue as easing pandemic restrictions boosted demand. Its share price was down 6%. The movie theater also said it will begin to accept cryptocurrency payments at U.S. locations this year.
3D Systems (NYSE:DDD) jumped more than 20% after reporting quarterly beat on the top and bottom lines.
Squarespace (NYSE:SQSP) fell nearly 9% after reporting a wider loss than expected as rising costs offer a 31% jump in revenue.
In other news, New York Governor Andrew Cuomo resigned amid a slew of harassment allegations, which he continued to deny.
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