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Stock Market News for Feb 17, 2021

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The Dow booked a second straight record high on Tuesday with progress in Biden’s $1.9 trillion coronavirus relief package and data showing COVID-19 cases dropping. However, the S&P 500 and the Nasdaq closed in the red as rising bond yields kept investors tensed.

The Dow Jones Industrial Average (DJI) rose 64.35 points, or 0.2%, to close at 31,522.75 and the S&P 500 lost 2.24 points, or 0.1%, to close at 3,932.59. The Nasdaq Composite Index closed at 14,047.50, declining 47.97 points, or 0.3%. The fear-gauge CBOE Volatility Index (VIX) increased 7.5%, to close at 21.46. Advancing issues outnumbered declining ones for 1.04-to-1 ratio on the NYSE and a 1.17-to-1 ratio on the Nasdaq favored advancers.

How Did the Benchmarks Perform?

The Dow closed higher for a second straight record high and among its top gainers were salesforce.com, inc. (CRM - Free Report) and The Boeing Company (BA - Free Report) that closed 3.4% and 2.9% higher, respectively. Salesforce carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The S&P 500 closed in the negative territory despite hitting record highs on Tuesday. Of the 11 major sectors of the broader index, only three closed in the green, with energy sector climbing 2.26%. Energy stocks soared after prices for natural gas jumped as a deep freeze in the South, especially Texas. The rally in oil prices put West Texas Intermediate crude futures above $60 a barrel for the first time in over a year.

The Nasdaq was dragged down by decline in shares of Peloton Interactive, Inc. (PTON - Free Report) that closed 5.7% lower. Followed by Gilead Sciences, Inc. (GILD - Free Report) , Seagen Inc. (SGEN - Free Report) and NetEase, Inc. (NTES - Free Report) that closed at least 3% lower for the day.

On Tuesday, the S&P 500 posted 75 new 52-week highs and no new lows, while the Nasdaq Composite recorded 363 new highs and nine new lows.

Stocks Struggled While Treasury Yield Hits Highest Level

On Tuesday, investors continue to wait for a COVID-19 relief package that is expected to come nearly $1.9 trillion, as per President Joe Biden’s proposal. The House Budget Committee is expected to put together the Biden administration’s proposal into one bill, which is expected to be voted on by the House before the end of February. The package is expected to include $1,400 per-person direct payments, an expanded child tax credit, an expansion of unemployment insurance with $400-per-week federal payments through Aug. 29 and aid to state and local governments.

While investors tracked progress in the relief package, news surrounding the decline in COVID-19 case numbers also lifted investors. Per a MarketWatch report, according to data aggregated by Johns Hopkins University, the number of coronavirus cases globally climbed above 109 million on Tuesday. However, the Cboe Volatility Index that settled at 19.97 on Friday, and marked its first significant breach of the threshold since the sell-off began in February last year due to the pandemic.

As the VIX broke below 20, it created a big “risk on” signal among investors and stocks reversed lower even as the major averages hit new highs in the day. This helped the 10-year Treasury yield to jump 9 basis points on Tuesday. The 10-year treasury note yield climbed to a one-year high of 1.30%, from 1.199% on Friday. This steady rise in yields, reflected that borrowing costs are growing and shows rising demand for risk-free fixed-income assets in comparison to stocks. Yields rise when prices fall and investors tracked the steady rise in government bond yields.

Stocks that Made Headline

Southwest (LUV - Free Report) Shares Up on Upbeat February Demand Trends

Southwest Airlines Co. (LUV - Free Report) provided an investor update, wherein the company stated that it has seen an improvement in leisure passenger demand and bookings for February compared with its previous estimations. (Read More)

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