The Dow Jones industrial average crossed the 32,000 mark for the first time to hit a record high after the Senate cleared a stimulus bill to boost the economy’s recovery from the coronavirus crisis.
The blue-chip index climbed more than 2 percent, or 651.74 points, on Monday to an intraday record of 32,148.04 following the Senate’s Saturday passage of President Biden’s $1.9 trillion spending plan.
The S&P 500 also jumped as much as 1 percent as the House prepared to vote on the COVID-19 relief bill this week. Materials, industrials, utilities and financials led the benchmark index, which traded below the all-time record it hit last month.
“Now you have a scenario in which the market is broadening,” Quincy Krosby, chief market strategist at Prudential Financial, told The Post. “Every positive data release on the vaccine campaign, for example, becoming more successful, this $1.9 trillion [bill] — all of this underpins that the economy is normalizing.”
But the tech-heavy Nasdaq slid as much as about 1.6 percent in a choppy session as the prospects for an economic reopening and rising bond yields put pressure on Silicon Valley stocks.
All of the so-called FAANG tech names — Facebook, Amazon, Apple, Netflix and Google parent Alphabet — were trading in the red Monday afternoon, as were companies that have benefitted from COVID-19 lockdowns, such as Zoom and Peloton.
“This market still seems to be in the ‘disbelief’ phase that is characteristic of early on in a corrective pattern and I would expect further downside for technology and related names to unwind the euphoric sentiment in recent months,” said David Keller, chief market strategist at Stockcharts.com.
The rally in other sectors suggested that Wall Street’s fears about rising yields for US government bonds were starting to wane even with the feds set to inject another load of money into the economy.
Yields for Treasury bonds, which move inversely to price, have climbed in recent weeks amid concerns about the coronavirus stimulus spending boosting inflation. Treasury Secretary Janet Yellen shrugged off those fears Monday, saying she did not think the latest package would drive up consumer prices.
“This is a bill that will really provide Americans the relief they need to get to the other side of this pandemic,” Yellen said in an MSNBC interview.
Billionaire hedge-fund titan David Tepper also appeared to soothe Wall Street’s nerves by saying he thought the recent surge in bond yields would soon stabilize, making it “very difficult to be bearish” on stocks.
Jim Paulsen, chief investment strategist at the Leuthold Group, agreed that bond yields will likely take a breather in the near term, though they could climb further later this year.
“Higher yields might start to have people rethinking how much they have in bonds or not,” Paulsen told The Post. “… Some may go, ‘Man, this is the highest yields I’ve seen in months.’ It might attract some buyers.”
With Post wires