The Dow Jones Industrial Average climbed on Monday as investors piled into economic comeback plays after Senate approval of a new Covid stimulus package, while a continuous sell-off in high-flying tech shares put pressure on the broader market.
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The blue-chip benchmark gained 306.14 points, or 1%, to 31,802.44 led by Disney. At its session high, the 30-stock average jumped 650 points to hit an intraday record high.
The S&P 500 erased a 1% gain to close 0.5% lower at 3,821.35.
The Nasdaq Composite slid 2.4% in volatile trading to 12,609.16 as Apple dropped 4.2% and Tesla fell 5.8%. Alphabet and Netflix both slipped more than 4%.
The tech-heavy benchmark closed more than 10% below its Feb.12 closing high, falling into correction territory.
Disney shares added more than 6% after California eased Covid rules, paving the way for Disneyland to reopen on a limited basis in April. American Airlines jumped nearly 5%, while United Airlines popped 7%. Target rose 2.5%.
The Senate passed a $1.9 trillion economic relief and stimulus bill on Saturday, paving the way for extensions to unemployment benefits, another round of stimulus checks and aid to state and local governments. The Democrat-controlled House is expected to pass the bill later this week. President Joe Biden is expected to sign it into law before unemployment aid programs expire on March 14.
Meanwhile, the Centers for Disease Control and Prevention said Monday people who’ve been fully vaccinated against Covid-19 can meet safely indoors without masks, further boosting reopening hopes. The positive news boosted stocks banking on a strong economic recovery.
Tech stocks remained the biggest losers on Monday, continuing the trend for the last few weeks. High-growth stocks, which were among the best performers last year, are particularly vulnerable as higher rates reduce the value of future cash flows.
Sentiment got a boost earlier Monday after hedge fund manager David Tepper said the recent sharp rise in rates is likely over and it’s hard to be bearish on stocks right now.
Reference: CNBC
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