#Market Snapshot: Dow sees modest pullback after another round of records

What’s driving the market?

The equities rally is due for a breather after surging to a series of new highs in recent days helped by good earnings reports, progress in Congress on President Joe Biden’s fiscal relief plan, and the accelerating rollout of coronavirus vaccines, along with declining new case numbers, analysts said.

In One Chart: The stock market is echoing 2009-10 — and that means a pullback could be near, analysts warn

Investors remain focused on prospects for another large round of aid spending with President Joe Biden and congressional Democrats preparing to push a package through the Senate via a process known as budget reconciliation that would require a simple majority. That likely means a package closer in size to Biden’s $1.9 trillion proposal than previously expected.

Meanwhile, the U.S. averaged 111,190 new coronavirus cases a day in the past week, down 36% from the average two weeks ago. Hospitalizations have also been falling, according to the COVID Tracking Project. There were 80,055 COVID-19 patients in U.S. hospitals on Sunday, down from 81,439 a day earlier and the lowest level since Nov. 18.

The focus on additional spending and optimism over vaccine rollouts is seen as a positive for cyclical stocks tied more closely to the economic cycle.

“The brighter outlook for U.S. economic activity likely explains why value and ‘old economy’ stocks are spearheading this latest charge higher, while the stay-at-home tech heavyweights like Amazon, Facebook and Apple have fallen behind,” said Marios Hadjikyriacos, investment analyst at XM, in a note.

Energy shares were among Monday’s market leaders as oil futures continued to push higher, with Brent crude
BRN00,
-0.03%,
the global benchmark, topping the $60-a-barrel level for the first time in over a year.

Upbeat expectations around the economic outlook aren’t universal, however.

The optimism index compiled by the U.S. National Federation of Independent Business fell 0.9 in January to 95.0, hitting the lowest level since the onset of the pandemic last spring

Data on U.S. December job openings is due at 10 a.m. Eastern.

St. Louis Federal Reserve Bank President James Bullard is scheduled to deliver remarks at noon Eastern.

Which companies are in focus?

• Drugmaker Eli Lilly & Co.
  LLY,
  -1.65%
  said chief financial officer Josh Smiley will resign after engaging in inappropriate personal communications with some employees. Lilly said that Anat Ashkenazi, a 20-year veteran of the company, would replace Smiley. Shares were down 0.7%.

• Shares of videogame publisher Take-Two Interactive Software Inc.
  TTWO,
  -6.52%
  were down 5% after reporting a better-than-expected outlook and results late Monday as sales saw a holiday boost during the COVID-19 pandemic.

• Shares of DuPont de Nemours Inc.
  DD,
  -2.26%
  fell 1.1% despite the materials and chemicals company reporting fourth-quarter profit and sales that beat Wall Street expectations.

• Shares of Goodyear Tire & Rubber Co.
  GT,
  +8.64%
  were up 0.5% after reporting profit and revenue that beat expectations.

• Coty Inc.
  COTY,
  -13.98%
  shares dropped more than 9% after the beauty products company reported fiscal second-quarter adjusted profit that declined less than expected, while sales fell a bit shy of forecasts.

What are other markets doing?

• The yield on the 10-year Treasury note
  TMUBMUSD10Y,
  1.146%
  fell 0.7 basis point to 1.152%. Yields and bond prices move in opposite directions.

• The ICE U.S. Dollar Index
  DXY,
  -0.38%,
  a measure of the currency against a basket of six major rivals, fell 0.3%.

• Oil futures turned lower, with the U.S. benchmark
  CL.1,
  -0.31%
  off 0.8% at $57.53 a barrel. Gold futures
  GC00,
  +0.35%
  edged higher, up 0.5% at $1,842.90 an ounce.

• The pan-European Stoxx 600 Europe index
  SXXP,
  -0.17%
  was down 0.2%, while London’s FTSE 100
  UKX,
  +0.05%
  rose 0.1%.

• In Asia, the Shanghai Composite
  SHCOMP,
  +2.01%
  rose 2%, while Hong Kong’s Hang Seng Index
  HSI,
  +0.53%
  rose 0.5%, and Japan’s Nikkei 225
  NIK,
  +0.40%
  rose 0.4%.