Dow futures rise 200 factors as shares are set to hit document ranges

Pedestrians walk past the Wall Street subway station near the New York Stock Exchange in the snow.

Michael Nagle | Bloomberg | Getty Images

Futures contracts linked to the major US stock indices rose in extended trading on Monday evening after a strong close last week.

Dow futures rose 215 points, indicating an implied open of roughly the same magnitude, while S&P 500 contracts added 22.5 points, or 0.5%. Nasdaq 100 futures rose 76 points, or 0.5%.

The US stock market was closed for Presidents Day on Monday.

The main averages ended last week with decent gains, although the rally appeared to have cooled somewhat in February. The blue-chip Dow Jones industry average was two little days changed, while the S&P 500 swung within 0.2% for three days in a row.

Still, the S&P 500 ended the week up 1.2% while the Dow added 1%. The tech-heavy Nasdaq Composite rose 1.7%. All three closed on Friday at a record level.

Equity strategists say the Covid-19 vaccine rollout, economic reopening, and anticipation of further fiscal stimulus are key to what has been buoyant February of the market.

“Covid is far from defeated, but the path to economic normalization is clearer as more vaccines are approved, reducing hospital stays and eliminating deaths,” Dennis DeBusschere, strategist at Evercore ISI, said in an email.

“Minister of Finance [Janet] Yellen’s strong case for additional incentives, followed by the Fed chairman [Jerome] Powell, who called maximum employment “our national target,” helped raise bond yields, inflation expectations and oil prices last week, “he added.

The Dow rose 4.9% in February, while the S&P 500 and Nasdaq rose 5.9% and 7.8%, respectively. The S&P 500 achieved ten record deals in 2021.

Pedestrians walk past a snow-covered bull sculpture during a late season in New York.

Lucas Jackson | Reuters

Still, DeBusschere warned that rising interest rates and uncertain political outlooks could prevent trading from getting too frothy in the short term, and advised investors to hold onto cyclical stocks, which could see the biggest upside as the US economy rebounds.

The so-called cyclical sectors, most sensitive to economic recovery, led the rally in February. Energy is up more than 13% since the start of the month, with finance and materials also being among the leading sectors.

Freezing weather in regions in the U.S. sparked another rally in energy futures on Monday, bringing West Texas Intermediate crude oil contracts above $ 60 a barrel for the first time since the coronavirus pandemic began.

In corporate news, CVS Health, Occidental Petroleum, Palantir and others will be reporting profits on Tuesday.

Executives from Robinhood, Melvin Capital and Citadel are due to testify to the House Financial Services Committee Thursday. Lawmakers are likely to grill the group over the wild trade in GameStop and other heavily trimmed stocks.

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