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Investing.com — Big tech stocks continued to dominate, pushing stocks higher on Monday even as many sectors came under pressure.
Fears about a surge in coronavirus cases, which are forcing some big U.S. cities to postpone or reverse business opening plans, counterbalanced encouraging news about vaccines under development. Either way, investors appear to be betting that FANG companies will be able to ride though Covid-induced volatility.
A smattering of corporate earnings are on tap this week, with big household names due to report Tuesday including Coca-Cola Company (NYSE:KO) and United Airlines Holdings Inc (NASDAQ:UAL). The petroleum industry is also supposed to release its weekly inventory report on Tuesday afternoon, even as industry reports on Monday point to a build-up of crude stockpiles.
Here are three things that could affect the markets tomorrow:
1. S&P shows broad sector weakness even though tech stocks are pushing it up
Eight of 11 S&P 500 sectors traded lower on Monday, along with more than half of the Dow Jones Industrial Average stocks, as Briefing.com noted. Yet the major indexes pushed higher, led by tech giants such as Amazon.com Inc (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT)and Google’s Alphabet (NASDAQ:GOOGL) Inc Class C (NASDAQ:GOOG). Tesla Inc (NASDAQ:TSLA) moved up.
For the year, only four S&P sectors are positive, including technology, consumer discretionary, communication services and healthcare.
As big tech stocks continue to push higher, their influence on the market grows. They make up more than 20% of the market cap of the S&P 500 compared to just 10% a decade ago. Their dominance becomes a self-fulfilling prophecy, and they have helped return the S&P nearly back to its pre-Covid lockdown levels. Year-to-date, the broad market is down 0.19%, a breath away from being back in the green.
2. Good news on Covid vaccine progress boosts biotechs
Biotech was in the spotlight Monday because of positive news about progress on a vaccine, which lifted shares of Pfizer Inc (NYSE:PFE) and AstraZeneca PLC ADR (NYSE:AZN).
Pfizer rose 1% and its partner Biontech Se (NASDAQ:BNTX) rose more than 5% on early positive data from its coronavirus vaccine. Meanwhile, Astra shares closed down 4%, but earlier its partner Oxford University announced good early results from their vaccine candidate. British biotech Synairgen (LON:SYNG) soared 590% after it said its experimental drug lowers the odds of serious Covid symptoms. Gilead (NASDAQ:GILD) Science, maker of another Covid treatment called remdesivir, closed up 0.7%.
Other biotechs fell on the news, including Moderna Inc (NASDAQ:MRNA)which dropped more than 12% after an analyst downgrade.
Covid cases have risen above 3.5 million in the United States, and deaths top 144,000, with more cities slowing down or reversing reopenings of public gathering places like restaurants and bars to stop the virus’ spread.
3. Oil price hovers at $40 a barrel as traders await word on demand
With Crude Oil WTI Futures prices hovering near $40 a barrel, traders have been looking to the weekly reports on crude stockpilesAPI Weekly Crude Oil Stock for any clues as to demand, and the signals have been all over the map. The numbers come out at 4:30 PM ET (1830 GMT).
Last week, the American Petroleum Institute reported an unexpectedly large draw of 8 million barrels from U.S. inventory the prior week. But indications are that the data the API reports on Tuesday for last week’s trend will show inventory increased, though likely by less than 1 million barrels.
Crude stockpiles can be a harbinger of business activity, because inventory decreases as demand picks up. The API numbers always come the day before official government data.
