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US STOCKS-Dow hits record high as materials, energy stocks jump

Published 05/10/2021, 10:28 PM
Updated 05/10/2021, 10:30 PM
© Reuters.

(For a Reuters live blog on U.S., UK and European stock
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* Energy stocks rise on U.S. fuel supply disruption fears
* FireEye gains in wake of cyber attack on Colonial Pipeline
* Indexes: Dow up 0.69%, S&P flat, Nasdaq down 1.33%

(Updates to open)
By Medha Singh and Sruthi Shankar
May 10 (Reuters) - The Dow Jones Industrial Average hit a
record high on Monday on hopes that interest rates would remain
lower for longer, while the S&P 500 was subdued as a slide in
technology shares offset a surge in commodity-linked energy and
material stocks.
Copper miner Freeport-McMoran FCX.N , aluminum producer
Alcoa AA.N and steelmaker United States Steel Corp X.N
gained between 2.7% and 5.8% as copper prices touched a record
high and aluminum scaled a new peak. MET/L
The materials sector .SPLRCM added 1.3% to hit an all-time
high, while the energy index .SPNY jumped to a more than
one-year peak after a cyber attack on top U.S. pipeline operator
Colonial Pipeline shuttered a fuel network that transports
nearly half of the East Coast's supplies, lifting oil prices.
"A lot of the inflation fears are overdone," said Scott
Brown, chief economist at Raymond James in St. Petersburg,
Florida. "There is a big difference between commodity price and
inflation at the consumer level. It generally takes a gigantic
increase in prices of raw materials to even have a tiny effect
on consumer price index."
The S&P 500 and the Dow ended at record closing highs on
Friday as an unexpected slowdown in monthly jobs growth fueled
bets that the U.S. Federal Reserve would remain accommodative
for longer.
With latest economic reports depicting that the U.S. economy
is not recovering at the explosive pace as previously forecast,
inflation numbers and retail sales data this week could chart
the next course for U.S. equities.
"Markets are certainly priced to perfection here. We're
likely to see some back and forth," Brown added.
Economy-linked financials .SPNY , industrials .SPLRCI and
healthcare .SPXHC hit fresh peaks and provided the biggest
boost to the S&P 500.
At 10:00 a.m. ET, the Dow Jones Industrial Average .DJI
was up 239.08 points, or 0.69%, at 35,016.84, the S&P 500 .SPX
was down 1.76 points, or 0.04%, at 4,230.84.
The tech-heavy Nasdaq Composite .IXIC was down 182.68
points, or 1.33%, at 13,569.56.
Technology .SPLRCT , communication services .SPLRCL and
consumer discretionary .SPLRCD that house megacap
technology-related stocks including Apple Inc AAPL.O , Alphabet
Inc GOOGL.O and Tesla Inc TSLA.O were the only S&P sectors
in the red.
Cybersecurity firm FireEye FEYE.O rose 3.3% as industry
sources said the company was among those helping Colonial
Pipeline to recover from one of the most disruptive digital
ransom schemes reported. Tyson Foods Inc TSN.N dropped 2% after the U.S. meat
processor warned rising costs would start to hit profits.
The earnings season is in its final stretch with about 87.2%
of 439 S&P 500 companies beating estimates for profit, according
to Refinitiv data. Analysts expect overall first-quarter
earnings to jump 50.4% from a year ago, their strongest growth
rate since 2010.
Advancing issues outnumbered decliners by a 1.32-to-1 ratio
on the NYSE. Declining issues outnumbered advancers for a
2.03-to-1 ratio on the Nasdaq.
The S&P index recorded 189 new 52-week highs and no new low,
while the Nasdaq recorded 148 new highs and 71 new lows.

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