Dow futures hold steady after Congress passes COVID aid package

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Dow futures hold steady after Congress passes COVID aid package


U.S. stock-index futures on Tuesday were poised to see a relatively subdued start to trade, though set for a far better start to trade than in the previous session, as worries about a new strain of COVID-19 subsided somewhat and as lawmakers hurried through a $900 billion coronavirus aid package for virus-stricken households and businesses, culminating months of tense negotiations.

How are equity benchmarks performing?
  • Futures for the Dow Jones Industrial Average
    YM00
    were edging up 8 points, or less than 0.1%, at 30,121.

  • S&P 500 index futures
    ES00
    were gaining 3.20 points to reach 3,689, a gain of less than 0.1%.

  • Nasdaq-100 futures
    NQ00
    were rising 41.25 points at 12,724.75, a climb of 0.3%.

On Monday, markets finished mostly lower but not before a major comeback:

  • The Dow
    DJIA
    closed 37.40 point, or 0.1%, higher at 30,216.45, after touching an intraday low of 29,755.53.

  • The S&P 500 index
    SPX
    slid 14.49 points, or 0.4%, to end at 3,694.92.

  • The Nasdaq Composite Index
    COMP
    closed 13.12 points, or 0.1%, lower at 12,742.52.

What’s driving the market?

What a difference a day makes.

President Trump is expected to sign another multibillion-dollar coronavirus aid package into law after the Senate and House voted late Monday to approve a $1.4 trillion spending bill that will fund the government through September and offer aid to troubled businesses and out-work-Americans.

The Senate passed the fiscal spending bill 92-6 while the House approved it in a 359-53 vote late Monday.

The passage of the relief package, seen as crucial to sustaining any rally on Wall Street, has substantially altered the complexion of the market compared to a day ago, when investors were fretting over mutations of the strain of coronavirus that causes COVID-19.

Medical experts, however, have said that the vaccines remain effective against the disease and emphasized that there is no sign that the mutation is more virulent. President-elect Joe Biden received a vaccine during an on-camera event on Monday.

Also buffeting the mood on Wall Street Monday was tightened lockdowns and intensified social-distancing measures implemented in Europe on reports of a more transmissible COVID strain.

In Europe, U.K. Prime Minister Boris Johnson said a COVID-19 variant was 70% more contagious, compelling more than 40 countries to ban U.K. arrivals. New strains were also observed in places like Italy and Australia.

Meanwhile, the three-day streak of deceleration for new COVID-19 cases, deaths and hospitalizations was snapped, with hospitalizations spiking to the 17th record this month. There were 201,723 new COVID-19 cases reported in the U.S. on Monday, up from 179,801 on Sunday, according to data provided by the New York Times.

Looking ahead, investors await a reading on U.S. third-quarter gross domestic product at 8:30 a.m. Eastern, which is expected to hold steady at an annual growth rate at 33.1%, as the economy attempts to bounce back from the deadly epidemic that threw the U.S. into the worst recession in recent memory.

Meanwhile, a report on consumer confidence and a reading of existing home sales are due at 10 a.m., along with a report on manufacturing activity in the Federal Reserve’s Richmond district.

Which stocks are in focus?
  • Apple Inc.
    AAPL
    shares were in focus after a report that the tech giant is targeting 2024 as the year it produces a passenger vehicle.

  • Shares of Sportsman’s Warehouse Holdings Inc.
    SPWH
    were being watched after news on Monday that it is being acquired by privately held Great American Outdoors Group, which already owns Bass Pro Shops, Cabela’s, White River Marine Group and nature-based resorts.

  • Shares of Peloton Interactive Inc.
    PTON
     were also in focus after it announced Monday afternoon that it is acquiring another manufacturer of exercise equipment, Precor, at a valuation of $420 million.

  • Tesla shares
    TSLA
    were still in focus after the electric -vehicle maker made its debut in the S&P 500 index, putting in the worst performance, off 6.5%, of the lot.

How are other assets performing?
  • In Asian trading, the Shanghai Composite
    CN:SHCOMP
    shed 1.9%, Hong Kong’s Hang Seng Index
    HK:HSI
     lost 0.7% and Japan’s Nikkei 225 declined 1%.

  • In Europe, the Stoxx 600 Europe
    XX:SXXP
    was trading 0.8% higher, following its largest one-day percent plunge in about two months, while London’s FTSE 100 index
    UK:UKX
     picked up 0.7%.

  • The 10-year Treasury note yield 
    BX:TMUBMUSD10Y
     was holding steady at 0.94%. Yields and prices move in opposite directions.

  • Oil futures retreated, with the U.S. benchmark
    CL
    down 1.2%, after a sharp drop on Monday, trading at $47.41 a barrel early Tuesday.

  • Gold futures for February delivery
    GCG21
     fell 0.4% at $1,875.90 an ounce, as a gauge of the U.S. dollar, the ICE U.S. Dollar Index
    DXY,
     rose 0.2% to around 90.186.



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