U.S. stocks closed mixed on Tuesday as investors took profits on pricey tech stocks, sending the Nasdaq into the red.
The Dow Jones Industrial Average rose 159.53 points to 26,840.40, while the S&P 500 edged up 5.46 points to 3,257.30 and the Nasdaq Composite Index dropped 86.73 points to 10,680.36.
Tuesday’s volume on the New York Stock Exchange totaled 3.92 billion shares with 2,236 issues advancing, 141 setting new highs, and 773 declining, with three stocks setting a new low .
Active movers were led by Heat Biologics Inc. (HTBX), NIO Inc. (NIO) and OPKO Health Inc. (OPK).
The EU passed a 750 billion euro ($860 billion) stimulus package that will be used to battle the impact of COVID-19 on the euro zone.
Traders watched developments in Washington for progress on the next coronavirus relief bill. However, House Minority Leader Kevin McCarthy said he does not expect a new coronavirus relief bill until August.
“I envision that this bill doesn’t get done by the end of July,” the California Republican said.
“I believe the stock market would benefit from news of a stimulus package coming to fruition,” said Kristina Hooper, Invesco’s chief global market strategist. “In times like this, despite a massive and rising budget deficit for the U.S., I believe big government is likely to be good news for the stock market.”
Investors have also been closely watching the ongoing strong performance of the tech sector.
“The price action [on Tuesday] is the reverse of Monday directionally as cyclicals/value outperform while investors book profits in growth/momentum,” wrote Adam Crisafulli of Vital Knowledge.
“The market, particularly tech stocks, is rallying on both good news and bad news, that tells us it’s all about momentum and not about the facts,” said Michael McCarthy, chief market strategist at CMC Markets Asia Pacific. “There are concerns we could see significant pullbacks before we make further gains, but at the moment you can’t stand in front of the train that is the Nasdaq 100 Index.”
Corporate earnings continue to stream in – as IBM (IBM) and Coca-Cola (KO) both released results that beat analysts’ expectations.
“We expect robust growth-company balance sheets and low interest rates to support higher valuations for growth stocks than for value stocks in the near term,” said Ken Johnson, Wells Fargo’s investment strategy analyst.
Overnight in Asia markets finished higher, as China’s Shanghai Composite index edged up 0.2%; Japan’s Nikkei-225 rose 0.73%; and Hong Kong’s Hang Seng Exchange jumped 2.31%.
In Europe markets traded higher, as Britain’s FTSE-100 edged up 0.13%, while France’s CAC-40 gained 0.22% and Germany’s DAX climbed 0.96%.
Crude oil futures rose 2.33% at $41.76 per barrel, Brent crude slipped 0.18% at $44.24. Gold futures rose 1.32%.
The yield on the 10-year Treasury fell 2.1% to 0.607% while yield on the 30-year Treasury slipped 0.45% to 1.313%.