By Yasin Ebrahim
Investing.com – The Dow ended above the lows of the day on Thursday, as gains in big tech kept a lid on losses from sectors tied to the progress of the economy in the wake of data showing the economy suffered its worst slump on record.
The Dow Jones Industrial Average fell 0.85%, or 225 points, but had been down by 547 points at the lows of the day. The Nasdaq Composite gained 0.43% and the S&P 500 slipped 0.34%.
Amazon.com (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL), and Facebook Inc (NASDAQ:FB) ended in the green ahead of their quarterly reports due after the closing bell.
Ahead of the earnings reports, some on Wall Street are betting that quarterly results will continue to show that big tech has benefited from the current environment.
"The reality is that the strong are getting stronger with FAANG names such as Amazon, Facebook, Google, and Apple beneficiaries of the current environment and a dynamic front and center this week, which we believe will put further fuel into the tech rally moving forward," Wedbush analyst Danial Ives added.
Elsewhere in tech, chip stocks continued to power ahead thanks to a rally in chipmaker Qualcomm.
Qualcomm (NASDAQ:QCOM) rallied 15% after reporting better-than-expected earnings for its fiscal third quarter and confirming it had settled a licensing dispute with Huawei that will boost revenue by $1.8 billion.
But financials and energy, both which are linked to the strength of the economy, were shunned following data showing U.S. GDP declined at an annualized rate of 32.9% in the second quarter of 2020, less bad than the expected decline of 34.5%, but still the biggest decline on record.
While the record decline in growth was largely priced in, investor hopes for a robust rebound still appear overly optimistic, with key data in the coming weeks likely to disappoint.
"With virus fears on the rise, jobs being lost and incomes squeezed, we feel the recovery could be much bumpier than markets seemingly do, and think we are in for some data disappointment over the next couple of months – starting with next week’s payrolls number," ING said in a note.
Energy fell nearly 4% to lead the broader market lower, pressured by falling oil prices on concerns about crude demand following weaker U.S. economic data.
Financials were not far behind, slipping about 2%, with banks including JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C) and Wells Fargo & Company (NYSE:WFC) in the red.