Day Traders Diary
The major averages fell from record levels on Tuesday as the recent rally driven by signs of strong economic rebound took a pause. The Dow Jones Industrial Average dipped 96 points. The S&P 500 slipped just 4 points while the Nasdaq dropped just 7 points. The blue-chip Dow and the S&P 500 both closed at record highs in the prior session.
Shares of airlines and cruise lines continued their recent gains. United Airlines gained 1.6%, while Delta rose 2.7%. Carnival, Norwegian Cruise Line and Royal Caribbean all traded in the green.
The market came under pressure even after Labor Department said U.S. job openings rose 268,000 to a two-year high of 7.4 million on the last day of February, according to its monthly Job Openings and Labor Turnover Survey, or JOLTS report. Economists polled by Dow Jones were expecting a total of 7 million.
Stocks rallied to record highs on Monday after Friday's blowout jobs report and a surge in the gauge of services industry activity showed the economic rebound gained momentum amid accelerated vaccine rollout.
Big banks including JPMorgan and Goldman Sachs kick off the new earnings season next week. First-quarter earnings are expected to be up 24.2% year over year, compared to 3.8% growth in the fourth quarter, according to Refinitiv.
Bond yields continued to fall from recent highs, easing fears of rising inflation. The 10-year Treasury yield dropped 6 basis points to 1.66% on Tuesday.
On Tuesday, California Governor Gavin Newsom said that the state will reopen its economy by June 15 provided that coronavirus vaccine and hospitalization cases remain stable.
Investors continue to assess President Joe Biden's $2 trillion infrastructure proposal announced last week and its chance to become reality. While politicians on both sides of the aisle support funding to rebuild American roads and bridges, disagreements over the ultimate size of the bill and how to pay for it remain, including Biden's plan to raise the corporate tax to 28%.
Biden said Monday he is not worried that a corporate tax hike would hurt the economy. Conservative Democrat Sen. Joe Manchin of West Virginia reportedly said he opposes the proposed tax hike to a level that high.
All comments contained herein are for informational purposes only, and should not be considered as a solicitation to buy or sell any security. The firm does not guarantee the accuracy or completeness of the information or make any warranties regarding results from it's usage.