Dow Jones, Nasdaq Rally As Biden Unveils $2T Infrastructure Plan; Apple Stock Up On Upgrade | #dating | #elderly | #seniors
The Dow Jones Industrial Average edged up after the Biden Administration’s $2 trillion infrastructure spending package was unveiled. Meanwhile, Apple (AAPL) ran higher on an upgrade, while Boeing (BA) was another blue-chip highflier.
But the Nasdaq was the leading index as tech stocks gained amid an easing of the 10-year Treasury yield. Meanwhile marijuana stocks such as Tilray (TLRY) and Canopy Growth (CGC) rose after New York state passed a bill to legalize recreational use.
Biden Infrastructure Plan; Treasury Yields Dip
President Joe Biden is getting set to officially unveil his $2 trillion spending package in Pittsburgh Wednesday. However details on the plan, which focuses on improving infrastructure, have been released. It will target areas including transportation, water systems, manufacturing and broadband. It will also include $400 billion measure to pay for care for elderly and disabled Americans.
To help pay for the plan, Biden is looking to raise the corporate tax rate from 21% to 28%. It will also include measures that aim to prevent firms from offshoring profits.
The plan is expected to face opposition on multiple fronts. Republicans have signaled strong opposition to big tax hikes, while moderate Democrats could oppose such lavish spending. Even progressives could throw a spanner in the works if they believe the plan is not ambitious enough.
Senate Minority Leader Mitch McConnell poured scorn on the Biden Administration’s plans, and claimed the economy “is getting better on its own.”
“They want to do another massive spending bill, which will include additional debt and, by the way, big tax increases,” the Republican leader said Tuesday. “I think this new Democratic government is headed in the wrong direction.”
OANDA senior market analyst Ed Moya told IBD he is skeptical about the Biden Administration plan.
“It is hard to believe that President Biden is about to deliver another multi-trillion dollar stimulus push. For the most part, it looks like financial markets have already priced in Biden’s infrastructure plan and tax increases,” he said. “US stocks continue to benefit from an exceptional Covid vaccine rollout, an above trend growth outlook, and a conservative Fed that will likely maintain an ultra-accommodative stance longer than it should.”
Meanwhile, the 10-year Treasury yield eased slightly to 1.715%. It comes after the latest ADP monthly jobs report showed 517,000 positions were added in March. This was lower than estimates, but much better than the 176,000 positions added in February. The government’s March jobs report is set for release Friday.
Nasdaq And S&P Rally
The tech-heavy Nasdaq was the best performing index as technology stocks posted gains. The index was up around 1.7%. Coronavirus vaccine play Moderna (MRNA) was the strongest Nasdaq performer, gaining more than 7%, while dating stock Match (MTCH) rose almost 6%.
U.S. Stock Market Today Overview
Last Update: 11:58 AM ET 3/31/2021
The S&P 500 also gained, though its rise of 0.7% was less impressive. Dow Jones stock Walgreens Boots Alliance (WBA) led with a gain of almost 7%. Applied Materials (AMAT) also posted a noteworthy gain, rising more than 4%.
The S&P sectors were mixed, with a balance of winners and losers. Technology was the best performing sector, while energy was the biggest laggard. Financials were also struggling.
Small caps were making solid gains, with the Russell 2000 up around 1%.
Growth stocks were also rising, with Innovator IBD 50 ETF (FFTY) up around 1%.
Apple Stock Rises As Dow Jones Gains
The Dow Jones was the worst performing major index. While it was positive, it was up a miserly 0.1%.
Apple was among the best performing Dow components, rising almost 3% after it scored an analyst upgrade. UBS upgraded Apple stock to buy from neutral and lifted its price target to 142 from 115.
Analyst David Vogt touted the firm’s investment in the auto industry, which he said is worth “at least” an incremental $14 per share. He is also expecting to see stable iPhone demand over the long-term, and stronger average sales prices.
Apple stock gapped up, and pulled away from its 200-day line. It is still below the 50-day line, however.
Boeing was another noteworthy performer, though its gains faded to around 0.8%. It is trading at the top of its buy range above a 244.18 buy point in a cup base. The 5% buy range runs as high as 256.39. Boeing was featured as Monday’s IBD Stock Of The Day.
Marijuana Stocks Higher
Marijuana stocks moved higher after New York state passed a bill to legalize recreational cannabis use. It is the 15th state to do so.
Embattled New York Gov. Andrew Cuomo is expected to sign the bill.
Tilray was up almost 5%, while Canopy Growth rose almost 3%. Aphria (APHA) gained almost 6%, while Aurora Cannabis (ACB) rose around 4%. Innovative Industrial Properties (IIPR) was up almost 4%.
Chewy Stock Bites Back On Earnings
IPO stock Chewy (CHWY) gapped up after reporting strong Q4 results late Tuesday. While it gave up some gains, it was still up around 8%
The online seller of pet food and accessories posted reported an adjusted profit of 5 cents per share on revenue of $2.04 billion. This was better than analyst views for a loss of 10 cents per share.
Chewy stock gapped up close to its 50-day line. While it has given up some early gains, it is still up around 10%. The 2019 IPO stock holds a poor IBD Composite Rating of 34, with earnings currently a key weakness.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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