U.S. markets rise as traders bullish on adoption of Biden-Covid’s $ 1.9 billion relief plan

U.S. equity futures are trading higher ahead of Tuesday’s Wall Street session, as optimism grows over President Biden’s $ 1.9 trillion coronavirus relief package passed in Congress under democratic control.

Teleprinter	security	Latest	Change	Change%
I: DJI	MEDIUM DOW JONES	31802.44	+306.14	+ 0.97%
SP500	S&P 500	3821.35	-20.59	-0.54%
I: COMP	NASDAQ COMPOSITE INDEX	12609.161019	-310.99	-2.41%

U.S. stock indexes closed largely lower, as rising bond yields helped trigger a stronger sell-off of tech company stocks.

The S&P 500 fell 0.5% to 3,821.35 after gaining 1% earlier. Due to their enormous size, declines by Apple, parent company Google, and other big tech stocks helped push the S&P 500 into the red, even though more stocks rose than fell in the ‘benchmark.

BARSTOOL SPORTS FOUNDER PORTNOY URGES AMATE INVESTORS TO TRUST THEIR GUT, IGNORE WALL STREET ‘COSTUMES’

The sell-off, which picked up near the end of the day, left the high-tech Nasdaq composite down 10.5% from the all-time high it reached on February 12. A decline of 10% or more from a recent high is known on Wall La rue as a “correction”.

Bond yields have increased significantly. The yield on the 10-year Treasury bill climbed to 1.60% from 1.55% on Friday night. But it fell back to 1.57% after hours.

Yields rose on rising expectations for growth and the inflation that could follow. Higher yields put downward pressure on stocks in general, in part because they can divert dollars that might have been invested in the stock market into bonds instead. This makes investors less willing to pay such high prices for stocks, especially those that seem more expensive, like tech stocks.

The Dow Jones Industrial Average rose 1% to 31,802.44. The Nasdaq lost 2.4% to 12,609.16.

Smaller company stocks, which led the market higher this year, posted more gains. The Russell 2000 Index added 0.5% to 2,202.98.

Financial stocks posted some of the best gains. Wells Fargo was up 3.3% and Citigroup 2.8%.

3 TRENDING STOCKS FOR 2021

Trading has been volatile in recent weeks as investors worry about soaring long-term interest rates in the bond market. The S&P 500 just made its first weekly gain in three weeks.

Tech companies are pulling back as investors begin to question whether the huge gains they made during the pandemic months can continue in the face of soaring inflation.

Investors are betting that $ 1.9 trillion in upcoming government stimulus will help lift the economy out of its coronavirus-induced malaise. There are also investors who bet that the recovery and improvement of the economy will lead to some inflation in the future.

The US economic aid package, narrowly passed by the Senate on Saturday, provides direct payments of up to $ 1,400 for most Americans and extends emergency unemployment benefits. It’s a victory for President Joe Biden and his Democratic allies, and final congressional approval is expected this week.

Oil prices have also increased. After plunging with the onset of the pandemic, as demand plummeted, prices rebounded. Last week, some observers expected the OPEC cartel and its allies to lift more restrictions and let oil flow more freely. But OPEC has agreed to leave most of the restrictions in place.

Meanwhile, Asian stocks were mixed on Tuesday, applauded by the expected adoption of the US stimulus package, although that optimism was tempered by concerns about inflation and the coronavirus pandemic.

Japan’s Nikkei 225 benchmark added nearly 1.0% to close at 29,027.94. South Korea’s Kospi slipped 0.7% to 2,976.12. The Australian S & P / ASX 200 added 0.5% to 6,771.20. The Hong Kong Hang Seng edged up 0.2% to 28,584.96, while the Shanghai Composite slipped 1.8% to 3,359.26.

Jingyi Pan, senior market strategist at IG Singapore, said Asian markets weighed “the impact of a global recovery alongside the prospect of an accelerated rise in US bond yields.”

Yoshimasa Maruyama, chief market economist for SMBC Nikko Securities, said the global economic rebound is stronger than some had previously predicted, and recognition is increasingly widespread in March than in February.

CLICK HERE TO LEARN MORE ABOUT FOX BUSINESS

“And this recognition of the recovery in March itself will work as a source of more confidence,” he said.

Vaccine deployments in the United States and Europe will also help instill confidence in future growth, he added.

Revised economic data for October-December, released on Tuesday, showed that the Japanese economy grew at an annual rate of 11.7%. This was lower than the 12.7% growth reported last month in the preliminary estimate.

Quarter over quarter, growth was 2.8%, revised from 3%, as public and private investment was not as positive as initially thought. The Japanese economy grew at a rate of 22.8% between July and September. This follows a sharp contraction as the pandemic hit tourism, trade, consumption and production.

GET FOX BUSINESS ON THE ROAD BY CLICKING HERE

In energy trading, benchmark US crude for April delivery added 2 cents to $ 65.07 a barrel. It fell $ 1.04, or 1.6% to $ 65.05 a barrel on Monday. It is still up 32.8% so far this year. Brent, the international standard, rose 16 cents to $ 68.40 a barrel.

In currency trading, the US dollar rose to 109.15 Japanese yen from 108.87 yen on Monday night. The euro strengthened to $ 1.1855 from $ 1.1846.

___

Damian J. Troise and Alex Veiga, Editors of AP Business, contributed.