By William Watts and Sunny Oh
The Dow industrials eked out a record gain, but the other main equity benchmarks limped lower, as progress toward President Joe Biden’s $1.9 trillion coronavirus relief package and data showing falling COVID-19 cases, failed to help stocks definitively overcome unease centered on a steady rise in government bond yields.
The energy sector, meanwhile, was the top gainer in the S&P 500 as a deep freeze swept across much of the middle of the U.S., sending prices of natural gas soaring and giving a lift to oil prices.
How are stock benchmarks performing?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.89% rose 64.35 points, or 0.2%, to 31,522.75, booking a second straight record high.
The S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.77% finished down 2.24 points, or 0.1%, to 3,932.59.
The Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.51% tumbled 47.97 points, or 0.3%, to 14,047.50.
Markets were closed in observance of Presidents Day on Monday. The Dow, S&P 500 and Nasdaq all closed at record highs Friday .
What’s driving the market?
Energy stocks gained 2.3% as prices for natural gas soared in response to a bitter cold snap that has put millions of people, notably a swath of Texas, in the dark, amid a crippling winter storm that has ratcheted up demand for energy assets.
The Electric Reliability Council of Texas estimated that about two million homes were without power on Monday and the freezing weather was seen blocking transportation of crude and fuel oil, while also forcing the temporary shutdown of refineries.
The energy problems sent oil and natural-gas prices to their highest levels in months, with West Texas Intermediate /zigman2/quotes/211629951/delayed CL.1 -0.44% closing above $60 a barrel for the first time since January, while Brent oil, the international benchmark , rose to over $63 a barrel and natural gas prices /zigman2/quotes/210189548/delayed NG00 -0.04% settled up nearly 5% on the day.
Though equities struggled to gain traction, the reflation trade appeared to be in place in commodities and bonds, with benchmark Treasury yields on the rise as investors await a COVID relief package that is expected to come in below, but close to, Biden’s $1.9 trillion proposal.
“Markets seem more than pleased by this return to ‘normalcy’ as further evidence builds that vaccines, enhanced government support and easy Fed policy open a clear path for a summer of recovery,” said Christopher Smart, chief global strategist and head of the Barings Investment Institute, in a note.
Smart said worries about long-term unemployment or runaway inflation seem “beside the point when so much of the near-term looks good.” But he also said those concerns will eventually take center stage.
The House Budget Committee was expected to put together all of the component’s of the Biden administration’s ambitious proposal into one bill to be voted on by the House before the end of the month.
The aid package that is being backed by Speaker Nancy Pelosi ‘s Democrats includes $1,400 per-person direct payments, an expanded child tax credit, aid to state and local governments and an expansion of unemployment insurance with $400-per-week federal payments through Aug. 29, The Wall Street Journal reported. It also would include a gradual hike in the minimum wage to $15 an hour, though the wage measure is seen facing a stiff challenge in the Senate, where two Democrats have raised concerns.