Stocks are flat, Dow and S&P 500 hover under records
10 Aug 2021
Stocks were little changed on Tuesday, with the Dow Jones Industrial Average and S&P 500 hovering under record highs, capped by concerns about a resurgence in Covid-19 cases.
Dow Jones Industrial Average rose just 10 points. The S&P 500 and Nasdaq Composite traded mildly higher.
The Senate could pass a $1 trillion bipartisan infrastructure bill as soon as Tuesday. The plan, which includes $550 billion in new spending on transportation and broadband, could help give the economy boost as peak growth slows following the reopening from the pandemic.
During regular trading on Monday, the Dow fell more than 100 points. The S&P 500 traded down 0.1% and the Nasdaq Composite rose 0.16%. Energy stocks led the declines after oil prices fell as much as 4% amid fears that a wave of Covid cases could lead to a demand slowdown.
Oil prices rebounded slightly Tuesday, up 1%.
“Despite the delta variant surge in cases across the U.S., recent mobility data suggest that consumer spending should remain robust,” Jason Pride, chief investment officer of private wealth at Glenmede, said in a note Monday. “Weekly foot traffic data gathered by Placer.ai for sectors sensitive to COVID-19 such as hotels, dining, leisure, and fitness continues to increase to sit near or surpass prepandemic peaks. However, as summer comes closer to an end, any significant declines or changes to the narrative are worth watching.”
Treasury yields rose, however, following data released by the Labor Department that showed job openings jumped to 10.1 million for the month of June, versus the 9.1 million expected by economists.
Still, the labor market might be tighter than it appears, according to Natixis’ Joseph Lavorgna.
“The July employment report was solid confirming the spell of robust economic growth and the 2021 boom,” he said in a note. “While the job market is still far away from a couple of key pre-pandemic benchmarks, recent data suggest there is much less labor slack than what is implied by the unemployment rate. If worker shortages persist, wages will be poised to rise further, and even more government spending will serve as an additional accelerant.”
The price of bitcoin Monday jumped 5%, its highest price since May. Gold recovered most of its losses from its overnight flash crash.
AMC‘s stock jumped 6.7% after releasing its earnings report Monday after hours, reporting a lower loss than expected. The company also announced it would begin accepting bitcoin at all U.S. locations this year.
Investors await the consumer price index and producer price index data, both of which measure inflation and are scheduled to come out Wednesday and Thursday, respectively. A handful of central bank speakers, including Chicago Fed President Charles Evans and Kansas City Fed President Esther George, are also expected this week. Investors will be listening for clues on how the Fed is approaching dialing back its bond purchases.