Stock ETFs Rally As S&P 500 Straddles Fresh Highs | ETF Trends

Stocks are holding higher ground Wednesday morning, as the S&P 500 reached a fresh all-time high, bolstered by healthy quarterly results from Target, while investors await the Fed Minutes later today.

After climbing to a fresh high on Tuesday, snatching back all of the index’s coronavirus-related losses, the S&P 500 continued to climb overnight and is in trading in the fresh high territory on Wednesday.

The 500 stock index climbed 0.2% Wednesday while and the Dow Jones Industrial Average advanced 0.3% before pulling back some, still having failed to reach a fresh all-time high. Meanwhile, the Nasdaq Composite climbed 0.1%, as Apple reached a record milestone of $2 trillion in market cap.

The S&P has advanced over 54% from its March low, terminating the shortest bear market in U.S. history.

The major stock index ETFs are trading mixed to higher along with their underlying benchmarks Wednesday. The SPDR Dow Jones Industrial Average ETF (DIA), SPDR S&P 500 ETF Trust (SPY), are both showing moderate gains while the Invesco QQQ Trust (QQQ) is lagging, essentially flat on the day.

Target shares surged 10.2% after the retailer reported simmering profits and sales last quarter. Digital sales gained 197% from last year at the same time. The retail store’s success help to drive other retail names like Macy’s, Nordstrom, and Big Lots higher as well, as they were all up more than 1%, helping the SPDR S&P Retail ETF (XRT) to gain 0.4%.

Despite the optimism surrounding the new highs, analysts caution the need for a quick continuation, or else there is a potential risk for a significant decline.

“Reaching a new all-time high may be a quickly forgotten speed bump in an ongoing new bull market, but if not substantially passed in the coming weeks, it could also prove to be a nagging glass ceiling that will continue to perpetuate fears this really is just a big bear market rally,” Jim Paulsen, chief investment strategist at the Leuthold Group, told CNBC. “Bulls need to ask whether the stock market may finally be getting ahead of its fundamentals while bears are forced to ask whether they are too underweighted in what could be just the beginning of a new bull market.”

In addition to monitoring a second coronavirus stimulus bill from Washington, investors are also awaiting additional corporate earnings data, as Nvidia reports quarterly results after the market close on Wednesday.

The FOMC will release its meeting minutes from its July meeting on Wednesday at 2 p.m. EST, which could shake up markets as well.

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