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May 26, 2021, 4:27 p.m. EDT

Dow ends slightly higher, small-caps surge 2% as reopening names catch bid

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By Joy Wiltermuth and Mark DeCambre

Major U.S. stock indexes booked modest gains Wednesday, while small-caps charged higher, as Treasury yields retreat and investors focus on shares that might perform better as the economy reopens from COVID.

Wednesday also marks the 125th anniversary of the Dow Jones Industrial Average , which made its debut May 26, 1896.

How did major indexes do?

  • The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.68% rose 10.59 points, less than 0.1%, to close at 34,323.05, after slipping between small gains and losses.

  • The S&P 500 /zigman2/quotes/210599714/realtime SPX +1.01% added 7.86 points, or 0.2%, ending at 4,195.99.

  • The Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +1.04% gained 80.82 points, or 0.6%, finishing at 13,738.00.

  • The small-capitalization oriented Russell 2000 index /zigman2/quotes/210598147/delayed RUT +0.46% surged 2%, or 43.52 points, ending at 2,249.27.

On Tuesday , stocks gave up early gains to end slightly lower. The Dow fell 81.52 points, or 0.2%, to end a three-day winning streak. The S&P 500 fell 0.2%, while the Nasdaq Composite shaved off 4 points, or less than 0.1%, to end at 13,657.17.

What drove the market?

Stocks edged up Wednesday and the main indexes finished not far off all-time highs, with retailers, travel and leisure companies in focus, as well as growth stocks.

Cathie Wood’s closely watch exchange-traded fund  ARK Innovation ETF /zigman2/quotes/204808965/composite ARKK +0.59% , which favors growth stocks and includes crypto /zigman2/quotes/225893452/composite COIN -0.51% exposure, advanced 1.8%, but was still 10.6% lower on the year to date.

See : Big bitcoin moves can shake stock market, study finds — ‘no longer fringe asset’

“While I don’t necessarily believe the market, as a whole, is viewing these stocks as having gotten to the point of value,” said Robert Pavlik, senior portfolio manager at Dakota Wealth for “high-valuation stocks,” some people see them “as having sold off enough to be attracting some attention.”

“The herd follows the lead sheep,” he told MarketWatch. “This is just a precursor to what the summer is probably going to look like.”

Meanwhile, Investor concern about inflation may be ebbing, with 10-year Treasury yields lower on the week at 1.572%, despite data earlier this month showing that the April consumer-price index rose at a hotter-than-expected 4.2% yearly pace.

Read: Inflation ‘surprises’ are ‘almost off the chart’ as data runs hotter than expected

Stocks may continue to struggle for direction ahead of the release Friday of the Federal Reserve’s favorite measure of inflation, the personal consumption expenditure index, analysts said.

But investors were bidding up shares of small-cap companies on the day, while technology stocks, represented by the tech-heavy Nasdaq Composite on pace for a weekly climb of 2%, as yields for government debt trade near 3-week lows, supporting buying in assets that have performed well in a low-interest-rate environment.

“This is essentially a rebound in the reopening names,” Quincy Krosby, chief market strategist at Prudential told MarketWatch.

/zigman2/quotes/210598065/realtime
US : Dow Jones Global
35,061.55
+238.20 +0.68%
Volume: 315.06M
July 23, 2021 5:16p
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/zigman2/quotes/210599714/realtime
US : S&P US
4,411.79
+44.31 +1.01%
Volume: 1.78B
July 23, 2021 5:16p
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/zigman2/quotes/210598365/realtime
US : Nasdaq
14,836.99
+152.39 +1.04%
Volume: 3.50M
July 23, 2021 5:16p
loading...
/zigman2/quotes/210598147/delayed
US : US Composite
2,209.65
+10.17 +0.46%
Volume: 1.13M
July 23, 2021 7:21p
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/zigman2/quotes/204808965/composite
US : U.S.: NYSE Arca
$ 122.43
+0.72 +0.59%
Volume: 4.39M
July 23, 2021 4:00p
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/zigman2/quotes/225893452/composite
US : U.S.: Nasdaq
$ 224.92
-1.16 -0.51%
Volume: 1.57M
July 23, 2021 4:00p
P/E Ratio
77.44
Dividend Yield
N/A
Market Cap
$47.30 billion
Rev. per Employee
$1.02M
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