US stock index futures were quiet Tuesday morning after the S&P 500 and Nasdaq Composite closed at record highs on Monday.
Futures contracts pegged to the Dow Jones Industrial Average added around 90 points. S&P 500 futures were little changed and Nasdaq 100 futures slipped 0.2%.
Morgan Stanley shares rose 3% in pre-trading hours after the bank announced it would double its quarterly dividend. The bank also announced a $ 12 billion share buyback program. The announcement follows last week’s Federal Reserve stress tests that all 23 major banks passed.
Wells Fargo announced it would double its dividend to 20 cents per share, pending board approval, and announced a $ 18 billion buyback plan. Bank of America, Goldman Sachs and JPMorgan also announced dividend increases.
Boeing shares rose nearly 1% in pre-market trading after United announced it would buy 200 Max planes. General Electric also boosted the industrial sector, rising more than 1% after Goldman Sachs named the stock a top idea.
Shares climbed to new highs during Monday’s regular trading amid the strength of big tech. The S&P 500 rose 0.23% to hit its third record high in a row. The Nasdaq was up nearly 1%, posting its fifth positive session in the last six, and also closing at a new high. However, the Dow lost 151 points due to a withdrawal from Boeing and Chevron, among others.
The early strength in cyclical and value stocks on Tuesday weighed against some of the recent rallies in growth and technology stocks. Andrew Smith, chief investment strategist at Delos Capital Advisors in Dallas, said he expected these groups to continue jockeying back and forth over the coming months.
“It’s not really going to be one of those easy rotations we’ve had in the past where all profits come from value or ETF asset flows grow out of value. I think it’s going to be a really choppy market.” Smith said, adding that he recommends investors add defensive stocks rather than just relying entirely on growth.
With the market entering the final trading days of June and the second quarter, the S&P 500 is well on its way to posting profits for its fifth straight month. The Nasdaq is approaching its seventh positive month in the past eight months. However, the Dow is in the red for the month and is well on its way to a four month winning streak.
By Monday’s close of trading, the S&P 500 was up 14% and the Dow and Nasdaq were up 12% through 2021.
“The markets have got off to a good start this year,” said Ryan Detrick, chief market strategist, LPL Financial. “Most of those gains came early in the year, however, and many stocks have stagnated in recent months,” he added. Detrick believes investors should overweight stocks versus bonds, but noted some market concerns, including increased valuations.
JPMorgan’s quantitative strategist, Dubravkos Lakos-Bujas, commented on CNBC’s “Squawk Box” that the market appeared to have upside potential in the short term.
“In our opinion, the growth policy background is still conducive to risk investments in general, certainly also to equities. At the same time, the positioning is not really extended to problematic terrain. So we think there is still a runway. “… In the summer, in the next two months, I think the market will continue to break out,” said the strategist.
On the data front, investors will be on the lookout for updated house prices and consumer confidence Tuesday morning.
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