#Market Snapshot: Dow jumps 600 points as focus turns from GameStop saga to earnings, vaccine rollout

How are stock benchmarks performing?

• The Dow Jones Industrial Average
  DJIA,
  +1.95%
  jumped 594.26 points, or 2%, to 30,806.17

• The S&P 500
  SPX,
  +1.75%
  advanced 67.05 points, or 1.8%, to 3,840.91.

• The Nasdaq Composite
  COMP,
  +1.67%
  was up 217.78 points, or 1.6%, at 13,621.18.

On Monday, stocks finished sharply higher. The Dow closed up 229.29 points, or 0.8%, at 30,211.91, the S&P 500 added 59.62 points, or 1.6%, to settle at 3,773.86, and the Nasdaq Composite Index finished with a gain of 332.70 points, or 2.6%, touching 13,403.39.

What’s driving the market?

After dizzying moves in popular, but relatively small, companies GameStop Corp.
GME,
-48.51%
and AMC Entertainment
AMC,
-39.47%,
investors may be training their attention on corporate quarterly results in the second-most active week of the fourth-quarter earnings season.

So far the numbers have been promising, even amid the coronavirus pandemic, with 81% of the 189 S&P 500 companies that had reported through Monday exceeding consensus expectations, FactSet data show.

Stocks continued to bounce back after major benchmarks ended Friday with the biggest weekly loss since October as the retail trading drama around GameStop and other shares appeared to trigger liquidation of long positions by hedge funds and other traders.

“There were fears that the GameStop trading frenzy would spill over into the broader market. that doesn’t seem to have been the case,” said Michael Reynolds, investment strategy officer at Glenmede Trust, in an interview.

“It’s a return to the same drivers of the market. Fiscal stimulus and vaccine progress continue to be tailwinds,” said Reynolds.

The CDC’s vaccine tracker is showing that as of 6 a.m. Eastern Monday, 32.2 million doses had been administered so far, which is more than the confirmed case tally. So far, 49.9 million doses have been delivered to states.

Hospitalizations have also been falling, according to the COVID Tracking Project. There were 93,536 COVID-19 patients in U.S. hospitals on Monday, down from 95,013 a day earlier and the lowest level since Nov. 29.

”Perhaps the most understated recovery has been in the number of daily COVID-19 cases and the hospitalization rate which had been improving well before the vaccine distribution began,” wrote analysts at Jefferies, led by Sean Darby, global equity strategist.

Cyclically oriented sectors, which are more closely tied to the ups and downs of the economy, were leading the way higher on Tuesday, with the financials and energy sectors both up around 2.5%. Banks stocks appeared to find support on a steepening of the yield curve.

Discussions around another round of coronavirus relief from Congress also were drawing attention on Wall Street, after a group of Senate Republicans outlined on Monday a roughly $618 billion offer, including a round of $1,000 direct checks for many adults.

House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer introduced a budget resolution yesterday, the first step in a process called budget reconciliation which would allow much of President Joe Biden’s $1.9 trillion stimulus plan to pass the Senate with just a simple majority.

“If both sides can’t come together that can be an even bigger fiscal boost, priming the economy to explode,” said Reynolds.

Which stocks are in focus?

• Shares of Tesla Inc.
  TSLA,
  +4.54%
  shook off premarket jitters, rising 4.6% after the electric car maker moved to recall roughly 135,000 Model S luxury sedans and Model X sport-utility vehicles over touch-screen failures, one of the electric-car maker’s largest-ever safety actions.

• United Parcel Service Inc.
  UPS,
  +1.00%
  shares rose 1.8% after the package delivery giant reported a fourth-quarter net loss of more than $3 billion as a result of a large pension charge, but delivered adjusted profit and revenue that easily exceeded forecasts.

• Shares of Pfizer
  PFE,
  -2.60%
  fell 2.4%, after the drugmaker reported fourth-quarter profit that missed expectations, but revenue that beat forecasts and provided an upbeat full-year outlook.

• ExxonMobil
  XOM,
  +3.27%
  shares rose 3.8% after the oil giant reported a fourth-quarter net loss of more than $20 billion, but an adjusted profit that topped expectations.

• ConocoPhillips
  COP,
  +2.26%
   said Tuesday it had a net loss of $800 million, or 72 cents a share, in the fourth quarter, after earnings of $700 million, or 65 cents a share, in the year-earlier period. Shares rose 3%.

• GameStop shares plunged more than 50%, after closing Monday down 31%.

• AMC Entertainment, the movie chain operator that is also popular on the Reddit Wall Street Bets forum, dropped 40%.

• Uber Technologies Inc.
  UBER,
  +7.64%
  shares rose 7.2% after the ride-hailing company announced a deal to buy on-demand alcohol marketplace Drizly for $1.1 billion in stock and cash.

• Shares of Harley-Davidson Inc.
  HOG,
  -18.88%
  fell nearly 19% after the motorcycle maker delivered a surprise fourth-quarter loss, as motorcycle revenue fell more than forecast. Harley also announced a five-year business strategy early Tuesday that aims for mid-single digit revenue growth in the motorcycle segment and low double-digit earnings per share growth by 2025

• U.S.-listed shares of Alibaba Group Holding Ltd.
  BABA,
  -2.48%
  traded 2.5% lower after the Chinese e-commerce giant topped sales expectations for its latest quarter and showed an improving profit trajectory.

• Shares of McKesson Corp. rose 2%, after the health-care supply and retail pharmacy company reported a fiscal third-quarter loss of more than $6 billion as a result of an opioid litigation charge, but adjusted profit and revenue that rose above expectations.

What are other markets doing?

• The yield on the 10-year Treasury note
  TMUBMUSD10Y,
  1.106%
  rose 2.4 basis points to 1.101% as global equities marched higher. Yields and bond prices move in opposite directions.

• The ICE U.S. Dollar Index
  DXY,
  +0.25%,
  a measure of the currency against a basket of six major rivals, rose 0.2%.

• Oil futures rose strongly, with the U.S. benchmark
  CL.1,
  +2.18%
  up 2.5% at $54.89 a barrel on the New York Mercantile Exchange after hitting its highest intraday level in more than a year. Gold futures
  GC00,
  -1.32%
  were under pressure, off 1.3% near $1,840.10 an ounce, while silver fell sharply as a hike in margin requirements appeared to squelch an attempted short squeeze by individual investors.

• The Stoxx 600 Europe index
  SXXP,
  +1.29%
  rose 1.4%, while London’s FTSE 100
  UKX,
  +0.78%
  gained 0.8%.

• In Asia, the Shanghai Composite
  SHCOMP,
  +0.81%
  rose 0.8%, Hong Kong’s Hang Seng Index
  HSI,
  +1.23%
  gained 1.2% and Japan’s Nikkei 225
  NIK,
  +0.97%
  advanced 1%.