The Dow Is Rising, Costco Stock Is Gaining and BioNTech Is Jumping

The stock market is staring at a mixed open as investors continue to contemplate the possibility of another Covid relief package and the meaning of rising Treasury yields.

Dow Jones Industrial Average futures have risen 84 points, or 0.3%, while S&P 500 futures are little changed at Nasdaq Composite futures have declined 0.3%. The yield on the 10-year Treasury note has risen 0.026 percentage point to 0.79%.

According to reports, Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi plan to discuss a possible Covid relief package, but have yet to reach a deal. Still, just the possibility of one—now of after the election—appears to be lifting the market.

“Markets will continue to focus on Capitol Hill and the ongoing negotiations for the next stimulus deal,” writes The Sevens Report’s Tom Essaye. “Specifically, Speaker Pelosi and Treasury Secretary Mnuchin are expected to have a follow up call today so investors will be anxiously waiting for any updates from their conversation.”

The recent increase in Treasury yields has been taken as a sign that investors are moving out the risk curve, but if they rise too quickly, it could be bad news. “The underlying question is how much can rates backup before stock prices begin to wobble and thereby effectively cap Treasury yields in the medium term,” writes BMO Capital Markets’ Ian Lyngen. “The traditional correlation between higher equities and yields appears to be functioning again; at least in the very near-term—even if assuming it’s a semi-permanent fixture may be folly.”

Logitech International (LOGI) has dropped 6% and Sonos (SONO) has fallen 2.2% after Apple (AAPL) stopped selling competitors speakers and headphones, a sign that it might be preparing its own devices. Apple stock has declined 0.5%.

Costco Wholesale (COST) has risen 1.2% after getting upgraded to Overweight from Equal Weight at Barclays.

Northrop Grumman (NOC) has gained 1.8% after getting raised to Outperform from Sector Perform at RBC Capital.

Southwest Airlines (LUV) has advanced 0.7% after the company asked employees to take pay cuts and its CEO said he would forgo a salary.

BioNTech (BNTX) has jumped 9.9% and Pfizer (PFE) has risen 1.3% after the European Union said it would speed up the process to approve their Covid vaccine.

Write to Ben Levisohn at Ben.Levisohn@barrons.com