Nasdaq, S&P 500 rise on Amazon boost; Dow under pressure
The S&P 500 and the Nasdaq rose on Tuesday, led by a bounce in Amazon.com, while a likely delay in the passage of new fiscal stimulus by Congress dampened hopes of a faster economic recovery from the coronavirus pandemic and kept the Dow subdued.
Amazon.com Inc AMZN.O jumped 4.0% after Bernstein upgraded its stock to “outperform”, saying the company will continue to receive a boost from premium subscribers and third-party merchants even beyond the pandemic.
Microsoft Corp MSFT.O, Apple Inc AAPL.O, Alphabet Inc GOOGL.O and Facebook Inc FB.O, which together fuelled a Wall Street rally since a coronavirus-driven crash in March, rose between 0.3% and 2%.
“The market is looking for some stability. Once again investors and traders are going to look to names that had gotten unduly beaten up,” said Kenny Polcari, managing partner at Kace Capital Advisors in Boca Raton, Florida.
Seven of the 11 major S&P 500 indexes were trading higher, with real estate .SPLRCR and consumer discretionary .SPLRCD leading gains.
U.S. stocks started the week on the back foot as fears about a new round of lockdowns in Europe and a stalemate in Congress over the size and shape of another coronavirus-response bill dented hopes of a swift economic recovery.
On Monday, the benchmark S&P 500 .SPX ended just under 9% down from its record high on Sept. 2, floating above correction territory.
Investors are now bracing for an extended period of market volatility on concerns over growing political uncertainty in Washington that have been sharpened by the death of Supreme Court Justice Ruth Bader Ginsburg.
“All the political energies are going to be directed towards the next Supreme Court nomination. I don’t see them paying attention to that and pushing stimulus through at the same time,” said Mike Zigmont, head of trading and research at Harvest Volatility Management in New York.
Federal Reserve Chair Jerome Powell on Tuesday told a congressional panel that America’s economy had shown “marked improvement” since the coronavirus pandemic drove it into recession, but the path ahead remains uncertain and the U.S. central bank will do more if needed.
Chicago Fed President Charles Evans also warned that the U.S. economy risks a longer, slower recovery, if not another outright recession, if Congress fails to pass a fiscal package.