Market reaches new highs as bullish sentiment persists
The S&P 500 is up 0.4% in midday action, setting a new all-time high alongside the Nasdaq Composite (+0.6%) and Dow Jones Industrial Average (+0.1%). The indices are currently off those highs, but a bullish sentiment continues to lift asset prices.
Contributing to the positive bias are reports that the rate of new coronavirus cases is slowing down, a view that monetary policy will nevertheless remain favorable due to risks associated with the virus, and perhaps a fear of missing on further gains. Fed Chair Powell, in his semiannual congressional testimony, said the Fed is "closely monitoring" the situation.
Nine of the 11 S&P 500 sectors are trading in positive territory, with today's leaders being the real estate (+1.4%) and consumer discretionary (+1.1%) sectors. The communication services sector (-0.4%) underperforms amid weakness in Facebook (FB 208.29, -4.77, -2.2%) after the stock was downgraded to Sell from Hold at Pivotal Research.
In key corporate news, the FTC said it will examine past acquisitions by Alphabet (GOOG 1518.36, +9.68, +0.6%), Amazon (AMZN 2178.19, +44.11, +2.1%), Apple (AAPL 322.30, +0.74, +0.2%), Microsoft (MSFT 186.61, -2.08, -1.1%), and Facebook. There was no noticeable reaction to the news.
Separately, the merger agreement between Sprint (S 8.28, +3.48, +72.4%) and T-Mobile US (TMUS 94.05, +9.52, +11.3%) was finally approved by a federal court in New York.
In earnings news, AutoNation (AN 47.27, +3.54, +8.1%) and Burlington Stores (BURL 243.88, +15.38, +6.7%) stand out after respectively beating estimates and raising guidance. Under Armour (UAA 16.57, -3.88, -19.0%) remains hampered by company-specific issues and cited the coronavirus for its downside guidance.
U.S. Treasuries are trading lower amid the positive bias in stocks. The benchmark 10-yr yield is up four basis points to 1.59%. The U.S. Dollar Index is down 0.1% to 98.73.
Reviewing today's economic data:
The NFIB Small Business Optimism Index for January increased to 104.3 from 102.7 in December.
The December Job Openings and Labor Turnover Survey showed job openings decline to 6.423 million from a revised 6.787 million in November (from 6.800 million).
