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Stock Market News for Feb 3, 2021

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Zacks Equity Research
·3 min read
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U.S. stocks ended higher for the second straight day on Tuesday as investors got optimistic about more coronavirus stimulus package from Congress and positive news on pace of immunization in the country. Also, the market volatility further eased as investors shed worries about a speculative retail trading frenzy.  Besides, investors also closely watched a spate of earnings reports from some of the major companies. All three major indexes ended in positive territory.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) gained 1.6% or 475.57 points to finish at 30,687.48. The bluechip index also registered its biggest percentage gain since Nov 16.

The S&P 500 jumped 1.4% or 52.45 points to end the day at 3,826.31, marginally shy of its record close of 3855.36. Consumer discretionary and financials sectors were the biggest gainers on the index. The Consumer Discretionary Select Sector SPDR (XLY) gained 2.1%, while the Financials Select Sector SPDR (XLF) gained 2.4%. All the 11 sectors of the benchmark index closed in positive territory.

The tech-heavy Nasdaq advanced 1.6% or 209.38 points to finish at 13,612.78 points, less than a percent high of 13,635.99. The rally was led by strong gains in tech stocks. Shares of Facebook, Inc. FB and Netflix, Inc. NFLX gained 1.9% and 1.7%, respectively. Netflix has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

The fear-gauge CBOE Volatility Index (VIX) was down 15.48% to 25.56. A total of 14.72 billion shares were traded on Tuesday, lower than the last 20-session average of 15.6 billion. Advancers outnumbered decliners on the NYSE by a 2.93-to-1 ratio. On Nasdaq, a 2.91-to-1 ratio favored advancing issues.

Bullish Sentiment Continues

Stocks rallied on Tuesday for the second consecutive session that coincided with a sharp reversal in GameStop Corp GME, which last week saw massive short squeeze after an army of retail investors on social media started trading shares in heavily sorted stocks. GameStop shares plummeted another 60% on Tuesday.

Other stocks popular with Reddit users also slipped on Tuesday, with AMC Entertainment Holdings AMC declining 41%.

Investors took a cue from this that speculative trading from retail traders is fast losing steam. On Tuesday, investors thus shifted focus back on the fourth-quarter earnings season, which so far has been impressive.

Higher Stimulus Hopes, Immunization Data Boost Confidence

Per the CDC’s vaccine tracker, 32.8 million doses have already been administered on people as of 6 am EST on Tuesday. This is now more than the confirmed number of Covid-19 positive cases reported so far. The data came as a major relief to investors, rising hopes of a faster economic recovery.

Investors also closed watched progress on the new coronavirus relief package from Congress after a group of Republicans met President Joe Biden with a counteroffer of roughly $618 billion against his plans of a $1.9 trillion stimulus package.

No economic data was released on Tuesday. 

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

See the 5 high-tech stocks now>>

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Netflix, Inc. (NFLX) : Free Stock Analysis Report
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