Dow Turns Positive as Big Tech Cuts Losses

imageStock Markets22 minutes ago (Feb 23, 2021 03:36PM ET)

(C) Reuters.

By Yasin Ebrahim – The Dow turned positive Tuesday, after tech cut losses shrugging off jitters about rising inflation, while value stocks continued to rack up gains amid a favorable economic backdrop as progress on rolling out another round of stimulus continued.

The Dow Jones Industrial Average rose 0.35%, or 111 points. The S&P 500 was up 0.45%, while the Nasdaq Composite fell 0.1%, though had been down more than 1% intraday.

Senate majority leader Chuck Schumer promised “urgent and bold stimulus relief, and said the stimulus package was on track to reach U.S. President Joe Biden before unemployments benefits expire on March 14.

The strength to 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.

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.

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.

Technology, which has led broad-market rally since the pandemic lows in March, cut intraday losses as big tech moved off lows.

Apple (NASDAQ:AAPL), (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) was flat.

Still, it’s too early to throw in the white flag on tech as the sector “will likely to be an ongoing leader and in many respects within this secular expansion story in the U.S,” Janney added.

In the earnings front, Home Depot (NYSE:HD), a major Dow component fell 4% 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.

Dow Turns Positive as Big Tech Cuts Losses

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