Market Snapshot: Dow, S&P 500 take a breather after record rises


U.S. stocks took a pause Tuesday, a day after the Dow industrials and the S&P 500 index ended at records in the first trading day after Easter, supported by evidence of a strong economic recovery from the coronavirus pandemic this year.

How are stock benchmarks performing?
  • The Dow Jones Industrial Average

    fell 70.13 points, or 0.2%, to 3,457.06.
  • The S&P 500

    was down 5.41 points, or 0.1%, at 4,072.50.
  • The Nasdaq Composite

    was off 9.11 points, or 0.1%, at 13,696.48.

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On Monday, the Dow rose 373.98 points, or 1.1%, to 33,527.19, marking its 18 record close of 2021, while the S&P 500 index ended 58.04 points, or 1.4%, higher to a record close at 4,077.91. The Nasdaq Composite Index ended up 225.49 points, or 1.7%, at 13,705.59, off 2.8% from its Feb. 12 record close.

What’s driving the market?

Amid evidence that the COVID rebound in the U.S. is under way, investors are focusing on the prospect of further fiscal support and increased corporate taxes.

The nonpartisan Senate parliamentarian on Monday ruled in favor of a Democratic effort to pass additional legislation through a process called reconciliation, which could pave the way for Democrats to approve President Joe Biden’s $2.3 trillion infrastructure bill.

However, Joe Manchin, Democratic Senator for West Virginia, said he wouldn’t support raising the corporate tax rate to 28% from 21% as proposed by Biden to fund the infrastructure package, Axios reported. Manchin’s stance suggests that infrastructure’s passage could still face challenges within its own party despite the use of the reconciliation procedure.

The infrastructure plan is seen as a much-needed measure to rebuild aging U.S. roads, bridges, tunnels and airport, as well as invest in broadband internet, fortify power and water supplies, and prepare for climate change.

“The three pillars of the stock market record highs are ultraloose monetary policy, fiscal support and the proof of the pudding: economic recovery,” wrote Neil Wilson, chief market analyst at

“[Federal Reserve Chairman] Jay Powell has (for now) put the doubters about point one to bed, whilst Biden’s Covid relief package and infrastructure bill are more than delivering on point two (and partially point three) by pumping somewhere in the region of 20% of US GDP into the system,” he said.

The International Monetary Fund on Tuesday raised its forecasts for U.S. and global economic growth. The IMF raised its U.S. outlook sharply in 2021 to 6.4% this year from 5.1%. The U.S. should see solid 4.4% growth in 2022.

The IMF raised its estimate for global growth to 6% this year and 4.4% next year. This represents an upgrade of 0.5% for 2021 and 0.2% for 2022 from what it forecast in January. Gita Gopinath, the IMF’s economic counselor, said “a way out of this health and economic crisis is increasingly visible.”

Separately, details of the fallout from the implosion of Archegos Capital Manangement, run by Bill Hwang, who failed to meet margin calls after making highly leveraged bets on a handful of stocks, was still emerging. Credit Suisse Group AG

said it would take a $4.7 billion charge and a nearly $1 billion loss. The bank said it would cut its dividend and announced the departure of two executives Brian Chin, investment banking head and chief risk and compliance officer Lara Warner.

Which companies are in focus?
  • Shares of Illumina Inc. ILMN were in focus after the biotech company late Monday said it expects first-quarter revenue to top $1 billion thanks to “record” orders and revenue growth in its gene-sequencing and related businesses. Shares rose more than 8%.
  • Novavax Inc. NVAX said late Monday that it plans to expand its COVID-19 vaccine trials to include children and teens by the second quarter. Shares were down 1.8%.
What are other markets doing?
  • The ICE U.S. Dollar Index
    a measure of the currency against a basket of six major rivals, was little changed.
  • The yield on the 10-year Treasury note

    was down 2.4 basis points at 1.685%. Yields and bond prices move in opposite directions.
  • Oil futures bounced, with the U.S. benchmark

    up 2.1% near $59.87 a barrel.
  • Gold futures edged higher, with the June contract

    up 0.4% at $1,736 an ounce.
  • In Europe, the Stoxx 600 index

    rose 0.7%, while London’s FTSE 100

    jumped 1.3%.
  • In Asia, the Shanghai Composite

    ended fractionally lower, while Japan’s Nikkei 225

    fell 1.3%.

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