Stock Market Today: Stocks Shake Off Delta Doubts, S&P 500 Tags New High
The S&P 500 set yet another new all-time high Tuesday as investors refused to hit the panic button over resurgent COVID caseloads.
Tuesday's trading session looked like Monday's in reverse, with stocks stumbling out of the blocks before regaining their footing and closing out the day in the green.
The market's resilience comes in the face of rising concern about the COVID-19 delta variant as it spreads nationwide, with particularly large outbreaks across the South. New York City said it would mandate proof of vaccination for many indoor activities, and Tyson Foods (TSN) joined a growing list of companies requiring their workforces to be inoculated against COVID-19.
Still, the market is hardly flinching.
"The delta variant has emerged as a credible downside risk to market performance, but one that we expect to slow, not derail, the recovery," says Lauren Goodwin, economist and portfolio strategist at New York Life Investments. "Consumers have learned to live with the virus, and the widespread availability of vaccines makes renewed shutdowns politically difficult."
Second-quarter earnings were also in focus Tuesday.
Under Armour (UAA, +7.5%) jumped as its plan to prioritize branded stores and online sales over department stores and discounters bore fruit; Q2 sales and profits beat expectations, and the athletic apparel retailer lifted its 2021 revenue outlook. Eli Lilly (LLY, +3.8%) missed on Q2 profits but exceeded estimates for sales, and mall operator Simon Property Group (SPG, +2.6%) announced a rebound in revenues to pre-pandemic levels.
The Dow Jones Industrial Average (+0.8% to 35,116) and Nasdaq Composite (+0.6% to 14,761) advanced to within close reach of their all-time highs, while the S&P 500 (+0.8% to 4,423) set a fresh record close.
Other news in the stock market today:
- The small-cap Russell 2000 gained 0.4% to 2,223.
- Take-Two Interactive (TTWO) was a big earnings loser, slumping 7.7% in the wake of its quarterly results. The video game maker reported higher-than-expected fiscal first-quarter earnings of $1.30 per share and revenue of $813.3 million. However, it expects current-quarter earnings per share to arrive between 35 cents and 45 cents on $740 million to $790 million in sales – below analyst estimates. TTWO also gave weaker-than-anticipated full-year guidance.
- It had been a lackluster market debut for Robinhood (HOOD), which went public last Thursday. HOOD spent its first few trading sessions churning below its $38 initial public offering (IPO) price, but today shot up 24.2% to close at $46.80. Wall Street was busy speculating as to what the catalyst for today's surge may have been, with some pointing to the financial services platform emerging as Fidelity's "top traded stock" to being mentioned on Reddit's WallStreetBets (WSB) – the community that has sparked insanely volatile moves in meme stocks this year.
- U.S. crude oil futures fell 1% to end at $70.56 per barrel.
- Gold futures gave back 0.4% to settle at $1,814.10 an ounce.
- The CBOE Volatility Index (VIX) dropped by 7.5% to 18.01.
- Bitcoin declined by 3.0% to $37,989.75. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)
Rocky Times Ahead?
As August gets started, several experts continue to warn about the potential for turbulence going forward.
Lindsey Bell, chief investment strategist for Ally Invest, notes that the S&P 500 has avoided a 3%-or-greater fall since May (a rare occurrence), "but the tide may be changing."
"August is the third worst performing month of the year, and it typically comes with increased volatility," she says. "Add to that the probability of lower volumes with people eager to take vacations before school starts back up."
But if a summer shake-up is in the cards, it won't just be because of weak seasonality.
"The Delta variant presents and the potential for policy angst from the Fed's upcoming Jackson Hole meeting could lead to volatility showing up as the summer comes to a close," Bell says.
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