U.S. stock futures were higher on Wednesday, as the market is set to rebound from Tuesday’s losses amid growing optimism over the Covid-19 vaccine rollout and economic reopening.
Dow Jones Industrial average futures rose 120 points. S&P 500 futures gained 0.2% and Nasdaq 100 futures added 0.3%.
President Joe Biden said late Tuesday that the U.S. will have a large enough supply of coronavirus vaccines to vaccinate every adult in the nation by the end of May. That would be two months ahead of schedule. The vaccine rollout is seen as key part in getting Americans back to work and for the economy to recover.
Stocks benefiting from economic activity picking up led the gains in the premarket. Norwegian Cruise Line Holdings was up 2.7%. United Airlines was up 2%. Bank and energy shares were also higher.
On Tuesday, the major averages gave back some their sharp gains from Monday. The Dow Jones Industrial Average lost 143 points, pressured by a 2.6% drop in Intel. The S&P 500 registered a loss of about 0.8%.
The Nasdaq Composite was the relative underperformer, dipping about 1.7% as Facebook, Microsoft, Amazon, Apple, Netflix and Google-parent Alphabet closed lower. The small-cap benchmark Russell 2000 dropped 1.93%.
“On a day with little major news and ahead of important news soon to come — Fed meeting and the jobs numbers— investors took the opportunity to take some profits from yesterday’s big recovery,” Jim Paulsen, chief investment strategist at the Leuthold Group, told CNBC. Tuesday’s “worst performer, technology, was yesterday’s biggest winner.”
The 10-year Treasury yield, watched closely by investors recently, fell to 1.40% on Tuesday. The yield surged to a high of 1.6% last week, raising concern among investors about higher borrowing costs and inflation.
The yield was back up slightly on Wednesday, but stock investors did not seem to mind this time.
“Overall, buy on the dip is alive and well,” added Paulsen. “Despite a turbulent couple days, the S&P 500 has risen 1.55% so far this week dominated by reopening plays including materials, industrials, financials, and energy with technology being a market performer.”
Private companies added 117,000 new jobs in February, according to a report Wednesday from payroll processing firm ADP. Economists polled by Dow Jones expect 225,000 private jobs were added last month.
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On Tuesday, the major averages gave back some their sharp gains from Monday.