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Nasdaq, S&P 500 Reach Record Closing Highs, Dow Posts Modest Loss

wallstreet aug20 25jan21 lt

Stocks fluctuated over the course of the trading session on Monday before eventually ending the day mixed. While the Dow closed modestly lower, the broader Nasdaq and S&P 500 reached new record closing highs.

The Dow climbed well off its worst levels of the day but still edged down 36.98 points or 0.1 percent to 30,960.00. Meanwhile, the Nasdaq climbed 92.93 points or 0.7 percent to 13,635.99 and the S&P 500 rose 13.89 points or 0.4 percent to 3,855.36.

The continued advance by the Nasdaq came as traders expressed optimism about upcoming earnings from big-name tech companies.

Tesla (TSLA), Apple (AAPL) and Microsoft (MSFT) moved notably higher ahead of the release of their quarterly results later this week.

On the other hand, the modest drop by the Dow comes as American Express (AXP) and Caterpillar (CAT) moved to the downside ahead of the release of their quarterly results.

Traders also kept an eye on developments in Washington amid reports of intensifying Republican opposition to President Joe Biden's proposed $1.9 trillion stimulus package.

A number of GOP Senators have expressed skepticism about the need for additional stimulus after recently approving a $900 billion relief package.

Republicans have expressed support for some elements of Biden's proposal but have raised concerns about other initiatives as well as the price tag for the overall bill.

Sector News

Biotechnology stocks showed a substantial move to the upside on the day, driving the NYSE Arca Biotechnology Index up by 2.1 percent to a record closing high.

Regeneron Pharmaceuticals (REGN) posted a strong gain after BMO Capital upgraded its rating on the company's stock to Outperform from Market Perform.

Considerable strength was also visible among utilities stocks, as reflected by the 1.7 percent gain posted by the Dow Jones Utility Average.

On the other hand, oil service stocks moved sharply lower on the day, dragging the Philadelphia Oil Service Index down by 3.4 percent.

The sell-off by oil service stocks came despite an increase by the price of crude oil, with crude for March delivery climbing $0.50 to $52.77 a barrel.

Airline stocks also showed a significant move to the downside on the day, resulting in a 2.7 percent slump by the NYSE Arca Airline Index.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan's Nikkei 225 Index climbed by 0.7 percent, while Hong Kong's Hang Seng Index surged up by 2.4 percent.

Meanwhile, the major European markets moved to the downside on the day. While the U.K.'s FTSE 100 Index slid by 0.8 percent, the French CAC 40 Index and the German DAX Index tumbled by 1.6 percent and 1.7 percent, respectively.

In the bond market, treasuries moved notably higher, extending the uptick seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 5.1 basis points to 1.040 percent.

Looking Ahead

Earnings news is likely to be in focus on Tuesday, with American Express, 3M (MMM), General Electric (GE), Johnson & Johnson (JNJ) and Verizon (VZ) among the companies releasing their quarterly results before the start of trading.

Trading may also be impacted by reaction to the Conference Board's report on consumer confidence in the month of January.

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