Stock futures slip after record-breaking session for Dow, S&P 500

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Stock-index futures pulled back Tuesday, indicating a lower start for equities a day after the S&P 500 and Dow Jones Industrial Average closed at records in a rally fueled by progress toward a COVID-19 vaccine.

What are major benchmarks doing?

Futures on the Dow Jones Industrial Average YM00, -0.58% fell 177 points, or 0.6%, to 29,688, while S&P 500 futures ES00, -0.46% were down 15.50 points, or 0.4%, at 3,607.50. Nasdaq-100 futures NQ00, +0.25% rose 41 points, or 0.3%, to 12,046.

The Dow DJIA, +1.59% on Monday advanced 470.63 points, or 1.6%, to close at 29,950.44, marking its first record finish since Feb. 12 and leaving it on the doorstep of the psychologically important 30,000 milestone. The S&P 500 SPX, +1.16% rose 41.76 points, or 1.2%, to close at a record 3,626.91. The Nasdaq Composite COMP, +0.80% rose 94.84 points, or 0.8%, to end at 11,924.13.

What’s driving the market?

Stocks rose Monday after Moderna Inc. MRNA, +9.57% said its COVID-19 vaccine candidate was 94.5% effective in preventing infections during a late-stage trial. A week earlier, Pfizer Inc. PFE, -3.51% and BioNTech SE BNTX, -13.66% announced their vaccine candidate was more than 90% effective.

Prospects for a vaccine prompted a rotation away from pandemic winners, including large-cap tech and internet stocks, in favor of more economically sensitive stocks.

While progress toward a vaccine is encouraging for 2021, investors have looked past a continued surge in COVID-19 cases and a lack of progress toward additional aid spending from Washington.

October retail sales due for release at 8:30 a.m. Eastern Tuesday morning will be watched for signs of consumer resilience. Economists surveyed by MarketWatch were looking for a 0.3% rise, a significant slowdown after a 1.9% jump in September. Excluding autos, sales are also expected to show a 0.3% rise.

“If the consumer can prop up the U.S. economy while the vaccine comes online and a new fiscal package is passed early next year, the market would have all the ingredients for a strong rally despite the challenges posed by the pandemic,” said Boris Schlossberg, managing director at BK Asset Management, in a note.

“If however, the second wave shows that it is clearly taking its toll on mobility and consumer spending, the markets could begin to correct sharply given little evidence of any immediate relief,” he said.

October industrial production and capacity utilization figures are also due at 8:30 a.m., with production expected to rise 1.1% after a 0.6% fall in September. Utilization is seen rising to 72.3% from 71.5%.

Data on September business inventories and a November home builders index are set for release at 10 a.m. In the afternoon, several Fed bank presidents are slated to speak at a conference on racism and the economy.

Which companies are in focus?
  • Walmart Inc. WMT, +1.26% shares were up 1.8% in premarket trade after the retail giant and Dow component reported results that topped expectations.
  • Fellow Dow component Home Depot Inc. HD, +0.86% shares fell 1.8%, despite the home improvement retailer reporting fiscal third-quarter profit that beat expectations and sales that rose well above forecasts.
  • Shares of Tesla Inc. TSLA, -0.10% rose more than 12% in premarket trade after S&P Dow Jones Indices late Monday said it would add the electric car maker to the S&P 500 beginning Dec. 21.
  • Shares of drugstore chains tumbled in premarket action after e-commerce giant Inc. AMZN, +0.07% said it would launch an online pharmacy. Walgreens Boots Alliance Inc. WBA, +3.25% shares were down more than 10%, while CVS Health Corp. CVS, +3.47% shares dropped nearly 7% and Rite Aid Corp. RAD, +9.28% shares were off more than 7%. Amazon shares were up 0.8%.