The S&P 500 snapped its five-day losing streak Tuesday, as big tech tech pared losses, shrugging off jitters about rising inflation, while value stocks continued to rack up gains amid a favorable economic backdrop as progress continued on rolling out another round of stimulus.
The Dow Jones Industrial Average rose 0.04%, or 13.75 points. The S&P 500 was up 0.06%, while the Nasdaq Composite fell 0.5%, though had been down more than 1% intraday.
Energy and financials were among the value sectors in the green, with the latter led by gains in People’s United Financial Inc (NASDAQ:PBCT) for the second day following its impending $7.6 billion takeover by M&T Bank Corp (NYSE:MTB). Other financial companies including State Street (NYSE:STT) Corp and Hartford Financial Services (NYSE:HIG) were 2% higher.
Energy, added to gains from a day earlier, up nearly 2%, as investors looked ahead to another weekly U.S. inventory report in the U.S., expected to show a sharp draw in the crude stockpiles that will boost expectations for a speedier pace of rebalancing.
The strength in value stocks has been driven by a brighter outlook for the economy. Covid-19 infections continue to decline, the pace of vaccine rollouts is increasing, and President Joe Biden's $1.9 trillion stimulus is expected to be rolled out sooner than later. The House is expected to vote on the bill later this week, before moving to the Senate, where it is expected to face opposition.
Senate Majority Leader Chuck Schumer promised "urgent and bold" stimulus relief, and said the package was on track to reach President Biden before unemployment benefits expire on March 14.
Despite the expectations for a stronger reopening and recovery, Federal Reserve Chairman Jerome Powell reiterated Tuesday that the economy remains "a long way" from the central bank's employment and inflation goals." The economy is likely to "take some time for substantial further progress to be achieved," Powell added.
Technology, which has led broad-market rally since the pandemic lows in March, cut intraday losses as big tech moved off lows.
Amazon.com (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL) and Facebook (NASDAQ:FB) were higher, with the latter climbing 2% after agreeing to reaching a deal to restore news pages in Australia. Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) ended lower.
On the earnings front, Home Depot (NYSE:HD), a major Dow component fell 3% despite delivering a fourth-quarter report that beat Wall Street estimates on the top and bottom lines.
In other news, Churchill Capital IV (NYSE:CCIV) slumped 37% after it confirmed a long-running rumor that it would be merging with Lucid Motors, an early stage electric vehicle company. Lucid will delay production for its EVs from this spring to the the second half of this year.
AT&T (NYSE:T), meanwhile, was flat as the telecoms giant is reportedly nearing a deal to sell a large bulk of a minority stake in its DirecTV and U-verse business to private-equity firm TPG, CNBC reported, citing people familiar with the matter.