Jan 13 (Reuters) - Wall Street’s main indexes were set to open lower on Wednesday as investors digested a recent rally to record highs on bets of a snap-back in economic activity fueled by more fiscal stimulus and vaccine rollouts.
Expectations of a hefty COVID-19 relief package under the incoming Joe Biden administration and hopes of a rebound in corporate earnings this year have eclipsed concerns over signs that the labor market recovery has stalled amid rampant COVID-19 infections.
“The market has discounted the rise in (COVID-19) cases and is really focused on what things look like in the second half of 2020, when vaccines have been widely distributed and the more impaired sectors of the economy are up and running again,” said Dan Eye, head of asset allocation and equity research at Fort Pitt Capital Group in Harrisburg, Pennsylvania.
“Valuations are stretched in a lot of segments within tech and growth. But that’s not the case with a lot of value sectors such as financials, energy ... things are set up very well for continuation of the rotation into value.”
Wall Street’s main indexes ended marginally higher on Tuesday on a boost from economy-linked financials, energy and materials stocks, while the small-cap Russell 2000, sensitive to domestic outlook, closed at an all-time high.
Investors are watching events in Washington, where the U.S. House of Representatives will vote on Wednesday to impeach President Donald Trump over the storming of the U.S. Capitol last week that stunned the nation and left five dead.
U.S. Federal Reserve officials on Tuesday said that concerns about continued violence pose a risk, but the transition to a new administration on Jan. 20 and a likely accelerating vaccine rollout have left them optimistic.
The new Senate will take up further COVID-19 relief legislation as soon as Democrats take control of the chamber, U.S. Senate Democratic Leader Chuck Schumer assured on Tuesday.
At 08:22 a.m. ET, Dow E-minis were down 55 points, or 0.18% and S&P 500 E-minis were down 11.5 points, or 0.3%. Nasdaq 100 E-minis were down 46.25 points, or 0.36%.
Earnings reports from big U.S. banks including JPMorgan and Citigroup will mark the unofficial start to the fourth-quarter earnings season later this week. Investors will gauge remarks from executives for clues on corporate America’s health.
Exxon Mobil Corp rose 1.3% in premarket trading after J.P. Morgan upgraded the stock to “overweight”, saying cuts in capital spending had put the oil major on track for a stronger performance.
General Motors Co added another 3.5% on top of Tuesday’s 6% jump after the automaker announced its entry into the growing electric delivery vehicle business.
Regeneron Pharmaceuticals climbed 2.5% as the U.S. government said it would buy 1.25 million additional doses of the company’s COVID-19 antibody cocktail for about $2.63 billion.
Target Corp rose 0.2% after it said robust online sales during the holiday season resulted in a 17.2% rise in comparable sales for the retailer. (Reporting by Medha Singh in Bengaluru; Editing by Maju Samuel)