Stock Market Recap: Wednesday, Feb. 10, 2021
Wall Street set another round of record highs before pulling back, trading in tight ranges afterwards — and more in Wednesday’s stock market recap.
The lower close followed worries over short-term economic growth caused by inflation data, and possible pricing pressures if Congress were to pass its latest stimulus proposal.
Stock Market Recap
The Dow gained 0.2% after testing a record high of 31,511.
The S&P 500 slipped a point, 0.03%, after testing a new lifetime high of 3,931.
The Nasdaq was down 0.3% after trading to an intraday record high of 14,109 while closing back below the 14,000 level.
The Russell 2000 fell 0.7% despite tagging an opening all-time high of 2,318.
Energy and Communication Services were the strongest sectors after advancing 1.9% and 1%, respectively. Consumer Discretionary was the weakest sector after falling 1%.
Stock Market Movers
Shares of Tilray Inc. (Nasdaq: TLRY) skyrocketed 50% after establishing an agreement with Grow Pharma to import and distribute its medical cannabis products into the United Kingdom.
The partnership allows Tilray to provide authorized U.K. patients in need with a locally maintained supply of medical cannabis solutions. Tilray expects to have a range of medical cannabis products available for patients in the U.K. by March 2021.
Stock Market Outlook
PepsiCo Inc. (Nasdaq: PEP) will announce fourth-quarter earnings ahead of Thursday’s opening bell. The company is expected to report a profit of $1.46 a share on revenue of $21.78 billion. The high estimate is at $1.47 a share with the low forecast at $1.43 a share and would equate to a penny beat or a four-cent miss.
Over the past four quarters, the company has topped forecasts by 17, seven, four cents and a penny in the year ago period. There are 23 analysts that cover the stock with four Strong Buy ratings, four Buy, 14 Holds, and one Underperform recommendation.
Global Economy
From the global stock market recap, European markets were weak.
Germany’s DAX 30 declined 0.6% while the Belgium20 and France’s CAC 40 fell 0.4%. The Stoxx 600 dipped 0.2% and the UK’s FTSE 100 slipped 0.1%.
Asian markets settled higher across the board.
Hong Kong’s Hang Seng jumped 1.9% and China’s Shanghai rallied 1.4%. Australia’s S&P/ASX 200 and South Korea’s Kospi rose 0.5% while Japan’s Nikkei climbed 0.2%.
U.S. Economy
MBA Mortgage Applications fell -4.1% last week following the 8.1% rise the previous week. The 12-month pace dropped to 35.9% year-over-year versus 44% previously. Both components contributed to the weakness with the purchase index falling -4.7% on the month while refis were down -4.2%. Mortgage rates increased with the 30-year rising to 2.96% from 2.92% while the five-year ARM edged up to 2.92% from 2.88%.
Stock Market Sentiment
The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) extended its winning streak to three sessions after topping out at $149.78. Lower resistance at $149.50-$150 was cleared and held. A close above the latter would signal strength towards $151.50-$152.
Support is at $149-$148.50.
Volatility Index
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was up for the third straight session despite tapping an opening low of 19.69. Key support at 20 was breached but held. A close below this level and the late-November low at 19.51 would be a bullish signal for continued upside in the market.
The bounce to 23.85 afterwards breached but held upper resistance at 23-23.50 and the 50-day moving average. A close above the 25 level would signal a retest towards 26.50-27 and the 200-day moving average.
Stock Market Analysis
The SPDR Small-Cap 600 ETF (NYSE: SLY) had its seven-session winning streak snapped despite tagging an all-time intraday high of $92.91. Uncharted territory and lower resistance at $92-$92.50 was cleared but held. A close above the latter would suggest ongoing momentum towards $93.50-$94.
Rising support is at $91-$90.50 followed by $89.50-$89.
RSI (relative strength indicator) is showing signs of rolling over with key resistance at 75 holding. A close above this level would indicate additional strength towards 80 and the overbought high from early January. Support is at 70-65.
Sector
The Dow Jones Transportation Average (NYSE: TRAN) was down for the first time in eight sessions after trading to a high of 13,041. Key resistance at 13,000 was breached but held. Continued closes above this level would indicate a retest towards 13,100-13,200 with the all-time high just north of the latter at 13,208.
Current support is at 12,900-12,800 on the lower close followed by 12,700-12,600 and the 50-day moving average.
RSI has leveled out with key resistance at 60 holding. A close above this level would signal additional strength towards 65-70, and the latter representing the January top. Support is at 55-50.
Check back after the closing bell for the most important news and numbers in the WealthPress stock market recap.