Dow futures rise 200 points as stocks look to add to record levels
Futures contracts tied to the major U.S. stock indexes rose early Tuesday after a key volatility gauge Wall Street watches declined, which could unleash more buying from quant funds.
Dow Jones Industrial Average futures climbed 200 points, while S&P 500 futures rose 0.6% and Nasdaq 100 futures gained 0.5%. The U.S. stock market was closed on Monday for President's Day.
The crack of the 20 level is viewed by some on Wall Street as a big "risk on" signal, which could trigger buying from algorithmic traders and other big players. The gauge last traded up about one point to 21 on Tuesday morning.
"Fear is receding from the market," Tom Lee, FundStrat's co-founder and head of research, said in a note on Friday. "And receding fear is followed by systematic and quant funds adding 'leverage' — in other words, this is a set-up to see a rally."
CVS Health jumped more than 2% after the drugstore chain's fourth-quarter earnings beat Wall Street's expectations with its pharmacy sales getting a lift from providing Covid-19 testing and vaccines.
The major averages finished last week at record levels even as February's rally appeared to cool off somewhat. The Dow has gained 4.9% in February, while the S&P 500 and the Nasdaq have rallied 5.9% and 7.8%, respectively. The S&P 500 has raked in ten record closes in 2021.
"Covid is far from defeated, but the path toward economic normalization is clearer as more vaccines that reduce hospitalizations and eliminate fatalities are approved," Dennis DeBusschere, strategist at Evercore ISI, said in an email.
Freezing weather in regions across the U.S. sparked another rally in energy futures on Monday and put West Texas Intermediate crude contracts above $60 a barrel for the first time since the early days of the coronavirus pandemic.
Bitcoin crossed $50,000 for the first time ever Tuesday, continuing its dizzying rally as more companies warmed to the crypto space.
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