Dow, S&P 500 Reach New Record Highs But Nasdaq Gives Back Ground

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(RTTNews) – The major U.S. stock indexes all moved notably higher in the first trading day of the New Year but have moved in starkly opposite directions in morning trading on Tuesday.

While the Dow and the S&P 500 have reached new record intraday highs, the tech-heavy Nasdaq has pulled back firmly into negative territory.

Currently, the major averages remain on opposite sides of the unchanged line. The Nasdaq is down 92.21 points or 0.6 percent at 15,740.59, but the Dow is up 338.82 points or 0.9 percent at 36,923.88 and the S&P 500 is up 17.55 points or 0.4 percent at 4,814.11.

The Dow is benefiting from strong gains by financial giants JPMorgan Chase (JPM) and Goldman Sachs (GS), which are moving higher along with Treasury yields.

Stocks benefitting from an economic reopening, such as cruise operators and airlines, have also moved to the upside even as the U.S. reported more than 1 million new Covid cases on Monday.

Indications the new Omicron variant causes milder symptoms has led to hopes the recent surge could actually help to accelerate the end of the pandemic.

On the U.S. economic front, the Institute for Supply Management released a report showing activity in the manufacturing sector grew at a slower rate in the month of December.

The ISM said its manufacturing PMI slid to 58.7 in December from 61.1 in November. While a reading above 50 still indicates growth in the sector, economists had expected the index to show a much more modest decrease to 60.2.

Energy stocks are seeing significant strength in morning trading, benefiting from a continued increase by the price of crude oil. Crude for February delivery is currently jumping $1.09 to $77.17 a barrel.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index is up by 4.6 percent, the NYSE Arca Oil Index is up by 2.6 percent and the NYSE Arca Natural Gas Index is up by 1.6 percent.

Substantial strength has also emerged among banking stocks, as reflected by the 3.1 percent spike by the KBW Bank Index. The index has reached its best intraday level in well over a month.

Brokerage, transportation and computer hardware stocks are also seeing notable strength on the day, while considerable weakness among biotechnology and software stocks is weighing on the Nasdaq.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan’s Nikkei 225 Index jumped by 1.8 percent, while Australia’s S&P/ASX 200 Index surged by 2 percent.

The major European markets have also shown strong moves to the upside on the day. While the German DAX Index has advanced by 0.9 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index are jumping by 1.4 percent and 1.7 percent, respectively.

In the bond market, treasuries are extending the steep drop seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.3 basis points at 1.661 percent.