Stocks slip from record highs as market rally takes a breather

U.S. stocks fell on Tuesday, with major averages pulling back from record highs as the market’s blistering rally in February took a pause.
The Dow Jones Industrial Average dipped about 60 points, falling for the first time in seven days. The S&P 500 fell 0.2% and the Nasdaq Composite traded slightly lower.
Investors have been taking more risk and powering the strong rally this month as the Covid vaccine rollout boosted optimism for a smooth reopening in the near future. At the same time, lawmakers in Washington appear to be moving closer to another economic relief bill. House Democrats on Monday unveiled the details of a relief proposal that included $1,400 direct checks with faster phase-outs than previous bills.
“The outlook for stocks continues to get more positive in the near term, plain and simple,” Tom Essaye, founder of Sevens Report, said in a note. “The stock positive formula of Massive (and unwavering) Fed support + Massive new fiscal stimulus + COVID declining and vaccine distribution ramping up is becoming more real, and stocks are rallying as a result.”
Cyclical sectors led the charge in February as investors flocked to areas of the market that would benefit the most from a rebound in economic activities. Energy have rallied 12% this month alone, while financials gained 6.7%.
Given the positive trends in the economic recovery, it would take a major change in the environment to cause anything more than a minor pullback, said Victoria Fernandez, chief market strategist at Crossmark Global Investments.
“To change the narrative, it would have to be something pretty significant,” Fernandez said. “It would have to be something that really changes the expectations about what’s going to happen with the labor market, or what’s happening with vaccines, or the guidance that we’ve been getting from companies on earnings.”
On Tuesday, investors will get more updates on the state of the economic recovery with the NFIB’s small business survey and the Labor Department’s job openings and labor turnover data.
Sumber : www.cnbc.com
