The S&P 500 and the Nasdaq closed in the green on Tuesday backed by solid gains in tech stocks. However, decline in long-term bond yield and halt in Johnson & Johnson vaccine rollout weighed on the Dow and pushed it to the negative territory.
The Dow Jones Industrial Average (DJI) fell 68.13 points, or 0.2%, to close at 33,677.27 and the S&P 500 rose 13.60 points, or 0.3%, to close at 4,141.59. The Nasdaq Composite Index closed at 13,996.10, adding 146.10 points, or 1.1%. The fear-gauge CBOE Volatility Index (VIX) decreased 1.5%, to close at 16.65. Advancing issues outnumbered declining ones for 1.06-to-1 ratio on the NYSE, while a 1.11-to-1 ratio on the Nasdaq favored decliners.
How Did the Benchmarks Perform?
The S&P 500 hit its 21st record high close on Tuesday and seven out of its 11 major sectors closed in the green. The utilities, consumer discretionary and technology sectors closed more than 1% higher for the session.The blue-chip Dow closed in the negative territory weighed down by at least 2.3% decline in shares of International Business Machines Corporation IBM and NIKE, Inc. NKE.
Even after a successful auction of 30-year government bonds on Tuesday, bond yield slipped and investors rushed for technology stocks. This pushed the Nasdaq to close higher for the day. Bigwigs like Tesla, Inc. TSLA closed 8.6% higher, along with 2.4% and 1% gain in shares of Apple Inc. AAPL and Microsoft Corporation MSFT. Other high-fliers of the Nasdaq were Moderna, Inc. MRNA, Okta, Inc. OKTA and Atlassian Corporation Plc TEAM that closed 7.4%, 6.6% and 5% higher, respectively.
On Tuesday, the S&P 500 posted 43 new 52-week highs and no new lows, while the Nasdaq Composite recorded 60 new highs and 81 new lows.A total of 9.3 billion shares were traded yesterday, lower than the last 20-session average of 11.4 billion.
JNJ’s One-shot Vaccine Halted
Investors’ optimism was kept in check on Tuesday after the U.S. Food and Drug Administration reported that it is holding back the Johnson & Johnson JNJ Covid-19 vaccine after reported cases of blood clotting in women. Per the FDA there has been six reported cases of a rare and severe type of blood clot after receiving the J&J vaccine. Hence, it is temporary halting the use of Johnson & Johnson’s one-shot COVID vaccine out of “an abundance of caution”.
The economic rebound is closely tied to vaccination effort in the United States. So far, 7 million Americans have received J&J shots, and about 9 million more have been delivered to states, per CDC data. The halt in usage of this one-shot vaccine has dampened investors sentiments as the U.S. is facing a new rise in COVID cases. As of Apr 13, Johns Hopkins University reported 70,000 new coronavirus infections per day.
Johnson & Johnson that carries a Zacks Rank #3 (Hold) closed 1.3% lower on Tuesday.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Consumer Prices Rise in March
On Tuesday, the government reported that the consumer price index rose 0.6% in March and increased 2.6% from the same period a year ago. The figures came in a smidge higher than the consensus estimate of 0.5%. While the Core CPI which excludes volatile food and energy costs, increased 0.3% last month.
Additionally, the Federal Reserve has reassured that monetary policy will stay accommodative. Fed will keep rates unchanged and allow inflation to rise for the economy to rebound from the pandemic slump.
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