Before the Bell: The fireworks of the past two weeks, which saw a late-January drop in the stock market followed by an early February surge in prices, would fade notably yesterday morning, as equities ended the first half of the session little changed. The early month's blistering rally had come about from optimism about a smooth reopening of the economy amid the somewhat improving rollout of the approved vaccines. In all, as the noon hour arrived on the East Coast, the Dow Jones Industrial Average was off slightly and the NASDAQ was ahead narrowly. Early this morning, the futures are pointing to a higher opening.

As to yesterday's market, consumer stocks were struggling at mid-session. Specifically, shares of cosmetics maker Coty (COTY) fell sharply after posting a 16% drop in quarterly revenues. Net income also was off. On the other hand, Hanesbrands Inc. (HBI) shares climbed after beating consensus profit targets. All of this took place on a day in which the second impeachment trial of the former President began in the U.S. Senate. As to the trial's outcome and assuming all 50 Democrats sitting in the Senate vote for conviction, affirmative votes from 17 Republicans would be required for a guilty verdict.

Meantime, expectations are that the stock market can grind still higher given the current optimism about the economy's comeback potential. However, we caution that based on recent employment figures, the business recovery is still quite fragile. Nevertheless, it also is true that COVID-19 infections and hospitalizations are on the decline and lower death rates should soon follow. As to economic news, there is much less on the calendar this week than last, but weekly unemployment filings are due out tomorrow.

Returning to the market, stocks stayed in a narrow trading band to the upside (in particular the Dow and the NASDAQ) into the middle of the afternoon, while the more broadly configured S&P 500 stayed near breakeven. The better performers were the industrials, communications services, and financials, while the main laggards in addition to consumer discretionary issues were energy and materials stocks. Meantime, one big winner on the day was Tilray (TILR), with that stock surging on news of a pact to distribute medical cannabis in the U.K. 

Things did not change much down the homestretch, although some late afternoon selling would put the Dow and the S&P 500 Index both narrowly into the loss column, while the NASDAQ retained a small advance. Looking out to a new day, the impeachment trial will be in the news but probably not that much of the Street's attention, which will still be largely on efforts to pass stimulus relief and getting vaccines into the arms of more Americans. – Harvey S. Katz, CFA

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.