Wall Street Mostly Higher as Investors Move into Economically Sensitive Cyclical Stocks

Optimism over positive vaccine trials and expectations of a new round of stimulus from the government  have offset a surge in coronavirus cases and worries over a mixed earnings season, encouraging U.S. stock market investors to rotate out of tech-driven stocks and into economically sensitive cyclical stocks.

The price action suggests investor willingness to bet on value plays indicating that investors think the global economy is going to improve.

“Ultimately, it’s healthier for the market when cyclicals perform better,” said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.

In the cash market on Tuesday, the benchmark S&P 500 Index settled at 3257.30, up 5.46 or +0.18%. The blue chip Dow Jones Industrial Average finished at 26840.40, up 159.53 or +0.63% and the technology-based NASDAQ Composite closed at 10680.36, down 86.73 or -0.91%.

The Internals

The S&P 500 Index moved into positive territory year-to-date, up more than 1%. The NASDAQ Composite is up nearly 20% since January 1, while the Dow Jones Industrial Average moved to down a little more than 5% for the year.

On Tuesday, financial, industrial and energy stocks provided the biggest lifts to the bellwether S&P 500 and blue-chip Dow as investors pivoted back to cyclicals. A drop in tech shares capped the NASDAQ’s gains.

Advancing issues outnumbered declining ones on the NYSE by a 4.28-to-1 ratio; On the NASDAQ, a 1.98-to-1 ratio favored advancers.

The S&P 500 posted 43 new 52-week highs and no new lows; The NASDAQ Composite recorded 116 new highs and 10 new lows, Reuters reported.

The Sectors

Of the 11 sectors in the S&P 500 Index, all but tech were in the black.

Energy companies were up 5.9%, the largest daily jump since June 5, as crude prices climbed amid signs of rebounding demand.

Stock Movers

Coca-Cola shares gained 2.7% after the beverage maker beat earnings estimates and said demand is improving.

Defensive industrial Lockheed Martin Corp topped quarterly consensus estimates and raised its full-year profit and resume estimates, sending its shares up 2.6%. The forecasts were driven by higher quarterly sales in its aeronautics unit that makes the F-35 fighter jet.

Tesla Inc fell 2.4%, retreating from Monday’s record closing high after JPMorgan Chase downgraded the electric car maker’s stock to “market perform.”

After the bell, United Airlines said it lost $1.63 billion during the second quarter, driven by a plunge in air travel demand because of the coronavirus pandemic. During the same quarter last year it posted a $1.05 billion profit.

For a look at all of today’s economic events, check out our  economic calendar. #US##StockMarket##S&P500#

Reprinted from YahooFinance，the copyright all reserved by the original author.