FX.co ★ US stocks mixed amid controversial fundamental background

Following the results of last Friday, the US stocks showed rather mixed dynamics. While the Dow Jones and S&P 500 indexes were dropping, the NASDAQ Composite was growing steadily, once again setting fresh highs.

Nevertheless, last week turned out to be quite beneficial for the US equity market. The Dow Jones index increased by 0.6%, the S&P 500 swelled 1.9%, and the NASDAQ Composite jumped by 4.2%.

The shares of the largest companies in the technology sector also skyrocketed. For example, Apple Inc. stocks surged by 9.4%, Facebook Inc. gained 9.2%, and Microsoft soared by 6.3%. Notably, these tech giants are scheduled to release their earnings reports this week.

Meanwhile, the prospects of Joe Biden’s American Rescue Plan are getting bleaker. The majority of Republicans express doubts about the size of the aid package. Moreover, a senator from Democrats has already announced that he will vote against the increased direct payments to Americans. According to Biden’s plan, the stimulus checks will amount to $2,000 a person. Therefore, even Wall Street can no longer ignore political tension. More and more investors are now worried that Biden’s aid package is unlikely to be adopted. For the time being, they are closely following the news regarding the new stimulus measures.

Joe Biden’s nominee Janet Yellen is likely to become the first woman Treasury Secretary. The Senate Finance Committee has already approved her candidacy. There was not a single vote against her.

The main economic indicators in the US were quite encouraging. In particular, the Manufacturing PMI unexpectedly reached its highest value of 59.1 in January. This came as a complete surprise to experts, who projected a decrease in the reading to 56.5. In the previous month, the reading totaled 58.3.

Another important index, the US existing home sales, also showed a significant increase, rising by 0.7% to 6.76 million homes. At the end of 2020, US existing home sales logged the highest value in the last fourteen years and reached 5.64 million, up by 5.6% in comparison to the figure recorded at the end of 2019. Analysts had forecast a more restrained growth of 2%.

Thus, the Dow Jones Industrial Average index declined by 0.57%, or by 179.03 points, to the level of 30,996.98. The S&P 500 index fell by 0.3%, or 11.6 points, to 3,841.47. The NASDAQ Composite index, on the contrary, surged by 0.09%, or 12.15 points, to 13,543.06.