By Shreyashi Sanyal
(Reuters) – The Dow hit a record high on Monday as the passage of a $1 trillion infrastructure bill lifted industrials, materials and other economy-focused sectors, while Tesla fell on top boss Elon Musk’s plan to sell about a tenth of his stake.
Six of the 11 major S&P 500 sector indexes were higher in early trading after the Congress on Saturday passed the long-delayed infrastructure bill hailed by President Joe Biden as a “once in a generation” investment.
“I think there is investor interest once again in the industrial and material sectors now that the infrastructure package has been passed,” said Sam Stovall, chief investment strategist at CFRA Research in New York.
“The markets are headed higher between now and year-end. But because we have gone six, seven days with new highs, investors are waiting for some short-term digestion of gains. Right now, seasonally, the market is in an uptrend.”
Tesla Inc fell 4.4% after CEO Musk tweeted on Saturday he would sell 10% of his holdings if users of the social media network approved the proposal. Around 57.9% of the people voted “Yes”.
“The majority voted for him to sell, which effectively signals that he is going to dump stock on the market,” said Russ Mould, investment director at AJ Bell.
“Investors may look at the situation and try and sell before he does, potentially then buying back at a lower price if they still like the stock.”
Wall Street’s main indexes hit record highs last week, supported by an upbeat earnings season, strong October jobs data and a positive update on Pfizer Inc’s experimental pill against COVID-19.
Investors last week also shrugged off the Federal Reserve’s decision to start reducing its monthly bond purchases, put in place to support the economy during the COVID-19 pandemic.
A Fed policymaker said on Monday he expects the central bank to raise interest rates twice in 2022 after the Fed wraps up its bond-buying taper mid-year.
With nearly 90% of the companies in the S&P 500 index having reported results, earnings are expected to have climbed 41.5% in the third quarter from a year earlier, according to Refinitiv IBES.
At 9:54 a.m. ET, the Dow Jones Industrial Average was up 170.49 points, or 0.47%, at 36,498.44, the S&P 500 was up 8.77 points, or 0.19%, at 4,706.30 and the Nasdaq Composite was up 25.84 points, or 0.16%, at 15,997.43.
Shares of cryptocurrency and blockchain-related firms Coinbase Global, Riot Blockchain, Marathon Digital Holdings and MicroStrategy Inc rose between 3.5% and 6.7%, as ether scaled new peaks and bitcoin neared a record high.
Coty Inc jumped 11.7% after the cosmetics maker raised its forecast for annual organic sales.
Advancing issues outnumbered decliners by a 2.21-to-1 ratio on the NYSE and by a 1.75-to-1 ratio on the Nasdaq. The S&P index recorded 45 new 52-week highs and no new lows, while the Nasdaq recorded 139 new highs and 21 new lows.
(This story corrects to say “A Fed policymaker”, not “Two Fed policymakers”, in paragraph 10)
(Reporting by Shreyashi Sanyal and Devik Jain in Bengaluru; Editing by Aditya Soni)
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