Dow falls 100 points from a record as the market’s February rally pauses

Dow falls 100 points from a record as the market’s February rally pauses

U.S. stocks inched higher on Thursday led by the technology sector, as the market looked to continue February’s momentum.

The Dow Jones Industrial Average climbed 50 points, and the S&P 500 gained 0.2%. Tech was the best-performing sector, rising about 1%. The tech-heavy Nasdaq Composite traded 0.3% higher.

After a strong runup in equities in the beginning of February, the market rally seemed to slow down a tad. The Dow advanced slightly Wednesday to eke out a record high, bringing its monthly gains to nearly 5%. The S&P 500 and the Nasdaq closed lower in the previous session.

“We pulled a lot of optimism forward, and the market is trying to figure out where we go from here,” said Gregory Faranello, head of U.S. rates trading at AmeriVet Securities. “The fiscal and monetary side of the equation seems priced into the market. Going forward, we need to see a broader economic recovery, a broader reopening and a broader dissemination of the vaccine.”

The market rallied to record levels as investors anticipated that any additional fiscal relief measures would support equities further. The S&P 500 has gained 4.3% this year so far, while the Russell 2000 jumped more than 15% year to date as beaten-down small caps rotated into favor with rising reopening optimism.

“We are in this melt-up environment where if there’s not a big negative headline, it seems every day the market just grinds a little bit higher,” said Ross Mayfield, investment strategy analyst at Baird.

Investors also took comfort in a solid earnings season. Of the S&P 500 components that have reported earnings thus far, more than 80% have topped Wall Street’s expectations, according to a CNBC analysis.

On the data front, new claims for jobless benefits came in at 793,000 last week, worse than an estimate of 760,000 from economists polled by Dow Jones.

Federal Reserve Chairman Jerome Powell said Wednesday that the economy faces challenges in the labor market, and so monetary policy needs to stay “patiently accommodative.” In remarks at the Economic Club of New York, Powell said the employment picture is a “long way” from where it needs to be.

Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.

About Author

Related posts