Tuesday March 9th

9-03-2021

Nasdaq futures jump 2.5% as bond yields retreat, Dow futures gain 170 points

U.S. stock index futures jumped in early trading Tuesday after bond yields declined, causing investors to buy the dip in beaten-up technology shares. Dow Jones Industrial Average futures rose 179 points, or 0.6%. S&P 500 futures added 1%. But the big move was in futures for the tech-heavy Nasdaq 100, which climbed 2.5%. Tesla shares popped 5% in premarket trading, while Apple, Amazon, Microsoft, Netflix and Alphabet all gained at least 2%. Technology shares are set to rebound from sharp losses as bond yields stabilized. The 10-year Treasury yield fell more than 6 basis points to 1.52%. It traded as high as 1.62% on Monday. On Monday, the Dow rallied more than 300 points on investor optimism about the economic comeback from the pandemic. Yet tech shares didn’t participate on Monday, with the Nasdaq Composite shedding 2% as a rapid rise in rates caused investors to rotate out of pricey tech shares. The tech benchmark closed more than 10% below its Feb.12 closing high, falling into correction territory. “Right now the market is broadening out and we think in an underlying sense the bull market is strengthening and that will play to our benefit over the longer term,” said Cathie Wood of Ark Investment Management on CNBC’s “Closing Bell” on Monday. “We are getting great opportunities” in the sell-off to buy the pure play names in the funds, added Wood, who focuses on disruptive technology stocks. High-growth names have been pressured lately as rising rates make their future profits less valuable today, compressing the stocks’ lofty valuations. Hedge fund manager David Tepper said on Monday the recent sharp rise in rates is likely over and it’s hard to be bearish on stocks right now. Tepper noted names like Amazon were starting to look attractive. Over the weekend, the Senate passed a $1.9 trillion economic relief and stimulus bill, which is set to include another round of stimulus checks. President Joe Biden is expected to sign the bill into law by March 14. The stimulus news prompted investors to rotate into reopening plays and cyclical stocks to bet on a sharp economic rebound. Banks, airlines, cruise lines and retailers led the gains on Monday. Asia-Pacific markets traded mixed Tuesday after starting the week by struggling for gains in what some analysts have described as a fragile environment for stocks. Japanese shares initially struggled after market open, but the Nikkei 225 erased early losses and closed up 0.99%, or 284.69 points, at 29,027.94. The Topix index advanced 1.27%, or 24.10 points, to 1,917.68. South Korean shares fell, with the Kospi closing down 0.67%, or 19.99 points, at 2,976.12 and the Kosdaq lost 0.93%, or 8.41 points, to 896.36. Chinese mainland shares fell, with the Shanghai composite closing down 1.82%, or 62.12 points, at 3,359.29 and the Shenzhen component fell 2.8%, or 388.09 points, to 13,475.72. In Hong Kong, the Hang Seng index advanced 0.24% in late-afternoon trade. Oil prices rose on Tuesday on expectations of a recovery in the global economy after the U.S. Senate approved a $1.9 trillion stimulus bill and on a likely drawdown in crude oil inventories in the United States, the world’s biggest fuel consumer. But a stronger dollar and receding fears of a supply disruption from Saudi Arabia, the world’s biggest oil exporter, after an attack on its export facilities capped price gains. Brent crude futures for May rose by 68 cents, or 1 %, to $68.92 a barrel, while U.S. West Texas Intermediate (WTI) crude for April rose 43 cents, or 0.66%, to $65.49. Gold rose more than 1% on Tuesday, popping back up above $1,700 as it gained some respite from a retreat in U.S. Treasury yields and the dollar following a slide to a nine-month low in the last session. Spot gold rose 1.2% to $1,701.91 per ounce by 1025 GMT, having earlier risen as much as 1.4% to $1,704.64. Prices slipped to their lowest since June 5 at $1,676.10 on Monday. U.S. gold futures climbed 1.3% to $1,700.20.