Stock Market Recap: Tuesday, Feb. 2, 2021
Wall Street showed strong gains again as ongoing stimulus hopes, vaccine progress and decreasing virus cases fueled bullish sentiment — and more in Tuesday’s stock market recap.
Financial and energy stocks outperformed while a number of heavily shorted names, such as GameStop Corp. (NYSE: GME) and AMC Entertainment Holdings Inc. (NYSE: AMC) that had been high-flyers recently, suffered steep losses.
Stock Market Recap
The Nasdaq surged 1.6% with the afternoon high tapping 13,652.
The Dow soared 1.6% following the intraday push to 30,840.
The S&P 500 gained 1.4% after trading to a high of 3,843.
The Russell 2000 rose 1.2% after trading to a high of 2,154.
Financials and Industrials led sector strength after zooming 2.4% and 2.1%, respectively. There was no sector weakness for the second straight session.
Stock Market Movers
Shares of Electronic Arts Inc. (Nasdaq: EA) traded to a fresh all-time high after announcing it is working on a new college football video game. The company hasn’t released a college football game since “NCAA Football 14” in July 2013.
Additionally, an analyst at Truist raised the firm’s price target on Electronic Arts to $156 from $138 while keeping a Buy rating.
Stock Market Outlook
Amazon.com Inc. (Nasdaq: AMZN) will announce quarterly numbers after Tuesday’s closing bell with the options market pricing in a 7-8% move in the stock. The company is expected to report a profit of $7.23 a share on revenue of $119.7 billion. The high estimate is at $11.16 a share with the low forecast at $4.51 a share and would equate to a $3.93 beat or a $2.72 miss.
The company has topped estimates in three of the past four quarters by $4.96, $8.84, -$1.24 and $2.44. There are 49 analysts that cover the stock with 18 Strong Buy ratings, 27 Buys, 3 Holds, and one Underperform recommendation.
Last quarter, Amazon expected net sales between $112-$121 billion, with growth between 28%-38% compared with Q4 2020. On the earnings call, Amazon said it expects uncertainty for the fourth quarter and therefore gave a wide range for revenue guidance.
Global Economy
From the global stock market recap, European markets showed continued strength.
The Belgium20 zoomed 2% and France’s CAC 40 surged 1.9%. Germany’s DAX 30 was higher by 1.6% and the Stoxx 600 was up 1.3%. The UK’s FTSE 100 advanced 0.8%.
Asian markets closed higher after China’s short-term money rates eased to two-week lows with the People’s Bank of China injecting 78 billion yuan ($12.08 billion) into money markets.
Australia’s S&P/ASX 200 soared 1.5% and South Korea’s Kospi was higher by 1.3%. Hong Kong’s Hang Seng jumped 1.2% and Japan’s Nikkei rallied 1%. China’s Shanghai gained 0.8%.
U.S. Economy
Chain store sales rose 4.4% year-over-year last week, up from the 3.9% in the prior week. This pushed January sales to a 3.2% year-over-year clip versus the 2.7% prior rate.
Stock Market Sentiment
The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) was down for the third time in four sessions with the morning low hitting $150.52. Prior and upper support at $151-$150.50 was tripped but held. A close below the latter would signal additional weakness towards $150-$149.50 with the January low at $149.93.
Lowered resistance is at $151.50-$152.
Volatility Index
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was down for the second straight session after testing a low of 25.31. Fresh and upper support at 25.50-25 was breached but held. A close back below the latter would signal a retest towards 24-23.50 and the 50-day moving average.
New resistance is at 27-27.50 and the 200-day moving average.
Stock Market Analysis
The SPDR Dow Jones Industrial Average ETF (NYSE: DIA) was up for the second straight session following the midday run to $308.43. Near-term and lower resistance at $308-$308.50 was cleared but held. A close above the latter would signal further strength towards the $309.50-$310 area.
Support is at $305-$304.50 followed by $303.50-$303 and the 50-day moving average.
RSI is in an uptrend after clearing key resistance at 50. Continued closes above this level would suggest strength towards 55-60. Support is at 45-40.
Sector
The Industrials Select Sector SPDR Fund (NYSE: XLI) extended its winning streak to two sessions with the high hitting $87.86. Near-term and lower resistance at $87.50-$88 was cleared but held. A close above the latter and the 50-day moving average would signal additional strength towards $89.50-$90.
Rising support is at $86.50-$86 followed by $85-$84.50.
RSI is in an uptrend with key resistance at 50 holding. A close above this level keeps upside towards 55-60 in play. Support is at 45-40.
Check back after the closing bell for the most important news and numbers in the WealthPress stock market recap.