The Dow Jones industrial average has declined but the improved market has provided more stimulus

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The three major records of U.S. stock were mixed on Thursday, but below the surface, there was strength in the market.

The

Dow Jones business average

fell 68.95 points, or 0.22%, to close at 30,991.52. The

S&P 500

slipped 14.30 points, or 0.38%, to finish at 3,795.54, and the

Nasdaq Composite

fell 16.31 points, or 0.12%, to close at 13,112.64. The biggest winner in the S&P 500 was a petrol refiner

HollyFrontier

(ticker: HFC), with an 11% stock increase.

President Joe Biden is expected to speak in the afternoon in detail about fiscal stimulus. Trillions of dollars of fiscal stimulus has boosted consumer savings, and a few trillion more dollars have been added to the pent-up demand that could be released when Covid-19 vaccines are released widely.

Investors remain optimistic about the direction of the economy. While the indices were sharply down, the stocks most sensitive to changes in the economy, such as value and small quotas, went up. The S&P 500 with market capitalization was dragged lower by the introduction of megacap technology stocks

Apple

(AAPL) and

Amazon.com

(AMZN), which fell 1.5% and 1.2%, respectively.

But the

Vanguard S&P 500 ETF Value Index Fund

(VOOV) rose 0.37%. The

Russell 2000,

index of small captains, rose 2%. Not only are small caps expected to be around twice the earnings recovery than big capes will see in 2021, but the smaller names are still trading at a discount to larger ones, enabling even more small caps.

The average Russell 2000 stock is still trading at a multiple price going on to earn according to the average stock on the

Russell 1000,

which includes some S&P 500 stocks, according to figures from UBS Wealth Management. Historically, the average Russell 2000 forward P / E rating is slightly lower than the Russell 1000, suggesting a slight upside for the smaller caps of the former.

“I’m much happier to keep too much weight in small portions right now,” said Jason Pride, chief private wealth investment officer in Glenmede. Barron’s.

Another sign of optimism for the economy: the

Invesco S&P 500 ETF equivalent weighting

(RSP), which shows how stocks rose overall – across sectors – stock 0.36%.

Investors are seeing “more of the drive for incentives and the scale of the incentive that is being introduced and is likely to go away and appear to have bipartisan support,” said Brian Price, head of investment regulation. for the Commonwealth Finance Network. Barron’s.

A report from Evercore strategists noted the reasons for the rise in Treasury yields as there are reports that Biden’s stimulus plan could result in $ 2 trillion, higher than some late calls for $ 1 trillion. Higher financial yields typically reflect rising inflation and economic expectations.

Negatively, initial jobless claims came in worse than expected, although investors stopped that. Applications came in at 965,000 for last week, higher than the consensus average for 800,000, and higher than the revised level of 784,000 the previous week, as were locksmiths. follow up.

“At a certain point, difficult work figures as we have seen this morning could be a link for those seeking correction, but the market seems to be that the light at the end of the tunnel is still in full swing. view, despite the spread of plodding vaccine. ”Mike Loewengart, head of investment strategy at E * Trade, wrote in comments in an email to the media.

Write to Jacob Sonenshine at [email protected]