Dow futures edge higher, but S&P 500, Nasdaq seen pausing after records

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MARKET SNAPSHOT

Futures on Dow Jones Industrial Average edged higher Tuesday morning but those on the S&P 500 index and Nasdaq looked set to take a breather after a rally to all-time highs to start the week.

How are stock benchmarks performing?

  • Futures for the Dow were up 46 points, or 0.1%, at 34,210.
  • S&P 500 index futures were off 1.40 at 4,279, a decline of 0.1%.
  • Nasdaq-100 futures retreated 17 points, or 0.1%, to reach 14,495.50.

On Monday, the Dow fell 150.57 points, or 0.4%, closing at 34,283.27, while the S&P 500 added 9.91 points, or 0.2%, to end at a record 4,290.61, and the Nasdaq Composite Index climbed 140.12 points, or 1%, finishing at a record 14,500.51.

What’s driving the market?

U.S. stocks were set for a mixed open but were near record territory for the S&P 500 and Nasdaq with investors buoyed by optimism about the economic recovery from the COVID pandemic.

Stock indexes may struggle to grind out new highs though, analysts said, and a recent Citigroup survey indicated that investors are more fearful of a pullback in equities than they are hopeful about an ongoing rally.

“US markets are grinding higher along the path of least resistance,” Neil Wilson, chief market analyst at Markets.com, said.

The Citigroup survey of its clients indicated that investors are most worried about Federal Reserve policy and inflation.

Market participants on Tuesday will be looking for fresh U.S. economic reports, including a reading on housing, the Case-Shiller Home Price Index for April at 9 a.m. Eastern, which is expected to show a rise of 1.2% on the month from 1.6% in the prior period. A report from the Conference Board on U.S. consumer sentiment is due at 10 a.m.

Among Fed speakers, Richmond Fed President Thomas Barkin is expected to speak at 9 a.m. Last week, he said that he thinks U.S. inflation pressures are temporary but the central bank needs to to be careful and watch prices closely. Barkin is a voting member of the Fed’s rate-setting committee this year.

Meanwhile,  the World Bank raised its forecast of China’s economic growth this year to 8.5% from 8.1% and said Tuesday that a full recovery requires progress in vaccinations against the coronavirus.

On the public health front, the World Health Organization is recommending that fully vaccinated people continue to wear face masks in public, breaking with the guidance offered by the Centers of Disease Control and Prevention. The WHO is concerned about the rapid spread of the highly infectious delta variant of the virus that is racing across the world. 

Which companies are in focus?

  • United Airlines Holdings Inc. UAL said Tuesday it is purchasing 270 new Boeing BA and Airbus aircraft to its fleet, in its biggest ever order and the largest by an individual carrier in the last decade, making a strong bet on a recovery in travel. 
  • Morgan Stanley MS said late Monday it will double its quarterly dividend to 70 cents a share, from 35 cents a share, beginning with the dividend expected to be approved by the board in the third quarter. 
  • Antitrust investigators at the U.S. Justice Department are looking at Google‘s digital ad market practices, Bloomberg News reported, citing people familiar with the matter.
  • Facebook Inc. finished at a record on Monday to take its market capitalization above $1 trillion for the first time.
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