Dow Flat as Focus Shifts to Historic Trump Impeachment Vote

Dow Flat as Focus Shifts to Historic Trump Impeachment Vote  | Jan 13, 2021 16:09

Dow Flat as Focus Shifts to Historic Trump Impeachment Vote

By Yasin Ebrahim – The Dow ended unchanged Wednesday, as political turmoil on Capitol Hill gripped investor attention ahead of the vote in the House to impeach President Donald Trump for an historic second time.  

The Dow Jones Industrial Average fell 0.03%, or 8 points. The S&P 500 was up 0.27%, while the Nasdaq Composite gained 0.43%.

The House of Representative is set to vote to impeach President Donald Trump for inciting the attack on the U.S. Capitol last week. But the trial in the Senate is unlikely to take place until after Trump leaves the White House as Senate Majority Leader Mitch McConnell rejected a call for an emergency session. The impeachment trial in the upper chamber is unlikely to get underway before Jan. 19, just a day before the inauguration of President-elect Joe Biden.  

Still, a conviction after impeachment is "unlikely to occur," Scotiabank said, as it requires a two-thirds Senate majority, meaning at least 17 Republicans would have to break ranks and vote with Democrats.

Beyond the backdrop of rising political tensions, utilities and technology stocks kept the broader market above the flatline.

Intel Corporation (NASDAQ:INTC) rallied 7% to boost tech after the chipmaker confirmed Chief Executive Bob Swan would step down next month following pressure from activist investor Third Point (NYSE:TPRE).

As well as Intel, the Fab 5 stocks also pushed tech higher.

Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), (NASDAQ:AMZN), Facebook (NASDAQ:FB) and Alphabet (NASDAQ:GOOGL) traded in the green.  

But weakness in cyclicals, paced by a decline in energy, kept gains in check

Energy fell nearly 1% on weaker oil prices after data showing a rise in weekly U.S. product inventories offset a larger-than-expected draw in crude stockpiles.  

The weakness in value stocks come as daily coronavirus infections in the U.S. surged to a record high.

"The U.S. has seen a sizable resurgence of the virus as of late with the death toll reaching a new daily record of nearly 4,500. According to Johns Hopkins, the U.S. caseload has reached 22.8M with more than 380,000 deaths," Stifel said.

But further fiscal support is expected to cushion the economic fallout and boost vaccine distribution efforts.

Biden will lay out his stimulus plan on Thursday. The plan is likely to include a proposal to boost direct payments to Americans to $2,000 from $600, provide state and local aid, and fund the ongoing vaccine roll out.

"The good news is ... the economy and equity markets will likely be helped by additional stimulus spending in addition to the recovery in consumer spending that we are projecting over the course of the final three quarter of 2021," Wells Fargo (NYSE:WFC) said.

In other news, Urban Outfitters reported weaker sales over the holiday period, sending shares 6% lower. The retailer reported down sales in the two months through Dec. 31 were down 8.4% year-on-year, and announced that Trish Donnelly is set to stand down from Jan. 31.

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