(Reuters) – The Nasdaq scaled a new closing high on Tuesday, but the broad market barely missed eking out a seventh day of gains as investors rotated out of large-cap tech names into other sectors expected to benefit from a proposed $1.9 trillion U.S. stimulus bill.
With the number of U.S. COVID-19 cases falling and expectations the stimulus package will be approved in Congress, investors are hard-pressed to find significant negatives, said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
“You’re not seeing money coming out of the market and going into cash,” James said. “You’re seeing money coming out of one sector and being rotated into another sector to maintain an overall long bias.”
Largely upbeat corporate earnings, along with monetary and fiscal support, powered the major U.S. stock indexes to successive record highs the past six days. Both the Dow and S&P narrowly missed closing higher, along with the Nasdaq.
“The backdrop is largely positive for stocks and I’m not sure there could be a better backdrop for risk assets in the near to intermediate term,” said William Herrmann, co-founder and managing partner at Wilshire Phoenix in New York City.
The energy sector, among those that led the recent rally, slipped 1.5%, while communication services rose 0.2%.
Democrats in the U.S. Senate continue to try to find a way to include a minimum wage increase in a comprehensive COVID-19 relief bill they aim to advance in the coming weeks, Senate Majority Leader Chuck Schumer said on Tuesday.
Toymaker Mattel Inc rose 2.1%, while telephone equipment maker Cisco Systems Inc slipped 0.9% ahead of reporting earnings after market close.
Analysts forecast a fourth-quarter S&P earnings gain of about 2.5%, a stark reversal from the 10.3% annual decline seen at the beginning of the year, per Refinitiv.
Gucci lipstick maker Coty Inc tumbled 15% as weak demand for makeup products wiped millions off its quarterly revenue.
Take-Two Interactive Software Inc fell 6.1% after the videogame publisher posted a drop in quarterly adjusted sales and shied away from announcing any new big releases.
Bitcoin fast approached the $50,000-mark as the afterglow of Elon Musk-led Tesla‘s (TSLA).O investment in the cryptocurrency had investors reckoning it may become a mainstream asset class for both corporations and money managers.
The S&P 500 posted 40 new 52-week highs and no new lows; the Nasdaq Composite recorded 428 new highs and six new lows.
Reporting by Herbert Lash, with additional reporting by Medha Singh and Devik Jain in Bengaluru; Editing by Maju Samuel and Dan Grebler