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US STOCKS-Dow hits record high as materials, energy stocks jump

Published 2021/05/10, 16:28
Updated 2021/05/10, 16:30
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(For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window.)

* Energy stocks rise on U.S. fuel supply disruption fears

* FireEye gains in wake of cyber attack on Colonial Pipeline

* Indexes: Dow up 0.69%, S&P flat, Nasdaq down 1.33% (Updates to open)

By Medha Singh and Sruthi Shankar

May 10 (Reuters) - The Dow Jones Industrial Average hit a record high on Monday on hopes that interest rates would remain lower for longer, while the S&P 500 was subdued as a slide in technology shares offset a surge in commodity-linked energy and material stocks.

Copper miner Freeport-McMoran FCX.N , aluminum producer Alcoa (NYSE:AA) AA.N and steelmaker United States Steel Corp X.N gained between 2.7% and 5.8% as copper prices touched a record high and aluminum scaled a new peak. MET/L

The materials sector .SPLRCM added 1.3% to hit an all-time high, while the energy index .SPNY jumped to a more than one-year peak after a cyber attack on top U.S. pipeline operator Colonial Pipeline shuttered a fuel network that transports nearly half of the East Coast's supplies, lifting oil prices. O/R

"A lot of the inflation fears are overdone," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida. "There is a big difference between commodity price and inflation at the consumer level. It generally takes a gigantic increase in prices of raw materials to even have a tiny effect on consumer price index."

The S&P 500 and the Dow ended at record closing highs on Friday as an unexpected slowdown in monthly jobs growth fueled bets that the U.S. Federal Reserve would remain accommodative for longer.

With latest economic reports depicting that the U.S. economy is not recovering at the explosive pace as previously forecast, inflation numbers and retail sales data this week could chart the next course for U.S. equities.

"Markets are certainly priced to perfection here. We're likely to see some back and forth," Brown added.

Economy-linked financials .SPNY , industrials .SPLRCI and healthcare .SPXHC hit fresh peaks and provided the biggest boost to the S&P 500.

At 10:00 a.m. ET, the Dow Jones Industrial Average .DJI was up 239.08 points, or 0.69%, at 35,016.84, the S&P 500 .SPX was down 1.76 points, or 0.04%, at 4,230.84.

The tech-heavy Nasdaq Composite .IXIC was down 182.68 points, or 1.33%, at 13,569.56.

Technology .SPLRCT , communication services .SPLRCL and consumer discretionary .SPLRCD that house megacap technology-related stocks including Apple Inc AAPL.O , Alphabet Inc GOOGL.O and Tesla Inc TSLA.O were the only S&P sectors in the red.

Cybersecurity firm FireEye FEYE.O rose 3.3% as industry sources said the company was among those helping Colonial Pipeline to recover from one of the most disruptive digital ransom schemes reported. Foods Inc TSN.N dropped 2% after the U.S. meat processor warned rising costs would start to hit profits. earnings season is in its final stretch with about 87.2% of 439 S&P 500 companies beating estimates for profit, according to Refinitiv data. Analysts expect overall first-quarter earnings to jump 50.4% from a year ago, their strongest growth rate since 2010.

Advancing issues outnumbered decliners by a 1.32-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 2.03-to-1 ratio on the Nasdaq.

The S&P index recorded 189 new 52-week highs and no new low, while the Nasdaq recorded 148 new highs and 71 new lows.

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