Stock Market Recap: Friday, Feb. 5, 2021
Wall Street closed with another round of record highs after the Senate approved a $1.9 trillion budget bill in a 51-50 reconciliation vote — and more in Friday’s stock market recap.
Additional news on the vaccine front helped sentiment after Johnson & Johnson (NYSE: JNJ) requested authorization of its one-shot coronavirus vaccine. If approved, it would be the third vaccine available in the United States.
Stock Market Recap
The Russell 2000 jumped 1.4% after closing on a fresh record high of 2,233.
The Nasdaq gained 0.6% while trading to a midday all-time high of 13,878.
The S&P 500 was up 0.4% with its lifetime high reaching 3,894.
The Dow climbed 0.3% following the morning pop to 31,252 and just 20 points away from a new record peak.
For the week, the Russell 2000 skyrocketed 7.8%; the Nasdaq surged 6%; the S&P 500 zoomed 4.7%; and the Dow added 3.9%.
Materials and Communication Services showed the most sector strength after rising 1.7% and 1.3%, respectively. Technology was the only sector laggard after giving back 0.2%.
Stock Market Movers
Shares of Peloton Interactive Inc. (Nasdaq: PTON) fell nearly 6% after announcing quarterly results. The company reported a second-quarter profit of 18 cents a share on revenue of $1.06 billion. Analysts were looking for a profit of 9 cents a share on sales of $1.03 billion.
Peloton said its Connected Fitness subscriptions grew 134% to 1.67 million while digit subscriptions grew 472% to 625,000. Overall members grew to over 4.4 million.
The pullback was likely due to the backlog. The company’s CEO said they are working to address long order-to-delivery timeframes. He reported that supply chain investments over the last several months are helping them better match supply and demand going forward.
Stock Market Outlook
The percentage of Nasdaq 100 stocks trading above the 50-day moving closed at 72.54%, up 4.90%. Near-term and lower resistance at 72.5%-75% was recovered. A move above the latter would indicate a retest towards 77.5%-80% and levels from mid-January. Support is at 70%-67.5%.
The percentage of S&P 500 stocks trading above the 200-day moving average settled at 88.11%, down 0.8%. Current and overbought resistance at 90% was challenged but held. A close above the latter would signal strength towards 92.5% and slightly overbought levels from the first half of December. Support is at 87.50%-85%.
Global Economy
From the global stock market recap, European markets were mixed.
The UK’s FTSE 100 was off 0.2% and Germany’s DAX 30 dipped 3 points, or 0.03%. France’s CAC 40 was higher by 0.9% and the Belgium20 rose 0.6%. The Stoxx 600 was unchanged.
Asian markets settled mostly higher.
Japan’s Nikkei soared 1.4% while Australia’s S&P/ASX 200 and South Korea’s Kospi gained 1.1%. Hong Kong’s Hang Seng rose 0.6%. China’s Shanghai slipped 0.2%.
U.S. Economy
Nonfarm payrolls added 49,000 jobs in January, versus the -227,000 drop in December. The unemployment rate dropped to 6.3% from 6.7%. Average hourly earnings edged up 0.2% following the prior 1% increase. On a 12-month basis, earnings are up 5.4% year-over-year from 5.1%. The average work week climbed to 35 from 34.7.
The labor force dropped -406,000 versus the prior 31,000 rebound, while household employment rose 201,000 versus 21,000 previously. The labor force participation rate dipped to 61.4% from 61.5%. Total private payrolls were up only 6,000 following the -204,000 drop. The service sector added 10,000 jobs, barely recovering from the -280,000 plunge in December. Leisure, hospitality jobs declined another -61,000 versus -536,000. Employment in the goods producing sector dipped -4,000 while Construction jobs were down -3,000 from 51,000. Manufacturing lost -10,000 while government jobs rebounded 43,000 from -23,0-0.
Stock Market Sentiment
The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) was down for the fourth straight session with the late-day low reaching $148.02. Fresh and upper support at $148.50-$148 was breached and failed to hold. A close below the latter would signal weakness towards $147-$146.50 and levels from last March.
Lowered resistance is at $149-$149.50 followed by $150.50-$151.
Volatility Index
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was down for the fifth straight session after tapping a low of 20.86 ahead of the closing bell. Key support at 21 was recovered. Continued closes below this level would indicate a retest towards 20-19.50 with the late November low at 19.51.
Lowered resistance is at 22-22.50 followed by 23-23.50 and the 50-day moving average.
Stock Market Analysis
The Wilshire 5000 Composite Index (NYSE: WLSH) extended its winning streak to five sessions following the intraday run to 41,498. Unchartered territory and lower resistance at 41,250-41,500 was cleared and held. A move below the latter would indicate additional momentum towards 41,750-42,000.
Rising support is at 41,000-39,750.
RSI (relative strength index) remains in an uptrend after clearing and holding lower resistance at 65-70. A close above the latter would indicate additional strength towards 75-80 and levels from early September. Key support is at 60.
Sector
The Technology Select Sector SPDR Fund (NYSE: XLK) was down for the second time in three sessions despite tagging an all-time intraday high of $136.05. Unchartered territory and lower resistance at $136-$136.50 was breached but held. A move above the latter would signal ongoing strength towards $137.50-$138.
Current support is at $135-$134.50 followed by $133.50-$133.
RSI is showing signs of leveling out with key resistance at 65 holding. A close above this level would signal a retest towards 70 and the December peak. Support is at 55-50 on a move back below the 60 level.
Check back after the closing bell for the most important news and numbers in the WealthPress stock market recap.