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Dow Ends Off Lows as Apple Sparks Tech Comeback

Stock Markets Sep 21, 2020 04:19PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The Dow ended off its lows Monday, as investors snapped up beaten-down tech names to push the broader sector into positive, though falling hopes of further fiscal stimulus weighed on investor sentiment.      

The Dow Jones Industrial Average fell 1.84%, or 509 points, but had been down over 900 points intraday. The S&P 500 was down 1.13%, while the Nasdaq Composite slipped 0.13%.

A wave of late-buying in Apple (NASDAQ:AAPL) and strength in Microsoft (NASDAQ:MSFT) on deal news sparked a move higher in the broader tech sector, helping the market recover from its lows of the day.   

Microsoft ended more than 1% higher after announcing a $7.5 billion deal to buy ZeniMax Media, the parent company of game developer and publisher Bethesda Softworks. The move comes as Microsoft seeks to ramp-up efforts to build its consumer business after failing in its quest to acquire TikTok's U.S. operations.

"With over 15 million subscribers currently on its Game Pass MSFT is doubling down on its consumer endeavors with this acquisition, a smart and strategic move in our opinion heading into its highly anticipated new console release," Wedbush analyst Daniel Ives said.

Tech helped offset weakness in value sectors on fears that a lack of further stimulus could hurt the U.S. economic recovery at a time when a surge in cases across Europe threatens global growth.  

Analysts have warned that President Donald Trump's intention to press ahead with the replacement of the late Supreme Court Justice Ruth Bader Ginsburg will all but end the prospect of further stimulus. Democrats have urged Trump to halt plans to appoint a replacement before the November election.  

"Trump has said he will announce his pick by Friday or Saturday while seeking a confirmation vote before the November 3rd election … this will result in a further lessening of chances at a US stimulus bill," Scotia Economics said. The move would likely take up "precious time for the executive and calendar space in the Senate before the election at the expense of things like a stimulus bill," the firm added. "Even if quick resolution is achieved, however, the Democrats’ spirit of cooperation is likely to be further lessened as total election gridlock takes root."

As well as concerns over stimulus, rising U.S.-China tensions also weighed on investor sentiment as Beijing is reportedly readying a list of U.S. companies to blacklist, The Wall Street Journal reported. The move comes in the wake of Trump's ultimatum for a U.S. company to take over video-sharing app TikTok.  Trump said he approved Oracle (NYSE:ORCL)'s proposal to take a partial stake in TikTok.

In other news, Nikola (NASDAQ:NKLA) slumped 19% after its founder, Trevor Milton, stepped down and was replaced by former General Motors (NYSE:GM) executive Stephen Girsky.

Cloud company Snowflake, which more than doubled on its market debut last week, fell 3% after Summit Insights Group issued a sell rating on the stock, and warned of a "violent sell-off."

Dow Ends Off Lows as Apple Sparks Tech Comeback
 

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Comments (7)
Man Up
Man Up Sep 22, 2020 4:53AM ET
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silly bears the market wont crash. buy the dip now
Matius Marvn
Matius Marvn Sep 21, 2020 6:15PM ET
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BLACK tuesday coming
Isaac Benitez
Isaac Benitez Sep 21, 2020 6:15PM ET
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all the week bro. powell wants stimulus
Bernard Tan
Bernard Tan Sep 21, 2020 6:15PM ET
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What will be the trigger to start it?
Michael Natan
Michael Natan Sep 21, 2020 5:59PM ET
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The Dems were never going to allow a stimulus package to pass before the election. They don’t care about helping the American people. Their only objective is to make President Trump look bad, in order to get the establishment back in power!
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Michael Natan
Michael Natan Sep 21, 2020 5:59PM ET
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you mean the divisivness spread by the Democrats? You need to learn to think for yourself!
Pete John
Pete John Sep 21, 2020 5:59PM ET
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not true...the democrats in fact pass 3 trillions dollars stimulus. the gop is the one that is cheap and does not want to sign it and help the american people.
Bernard Tan
Bernard Tan Sep 21, 2020 5:59PM ET
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Trump only thinks of himself, not us
Bernard Tan
Bernard Tan Sep 21, 2020 5:59PM ET
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Patrick Mueller : not today but after Nov 3.
Bernard Tan
Bernard Tan Sep 21, 2020 5:59PM ET
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Michael Natan : Dems are not the government but will be after Nov 3.
Ricardo Diogo
Rcd72 Sep 21, 2020 5:50PM ET
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soon these silly valuated markets will wake up and the floor has gone......Elvis buyers will have left the building...
Erski Gumby
SB20 Sep 21, 2020 5:50PM ET
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Everything in the market is valuated dude.
Eloy Rodrigo
Eloy Rodrigo Sep 21, 2020 5:29PM ET
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Search "No one can escape the 4 laws"
SHAUN Webb
SHAUN Webb Sep 21, 2020 5:01PM ET
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Apple has a lot more going on than a smart phone! Whiskey ***wake up!And Danny L. You’re just as brain dead but you’re intitled to your opinions. Be well!
whisky noob
whisky noob Sep 21, 2020 4:38PM ET
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Apple = Nokia 2.0 No innovation
Billy Bilnaad
Billy Bilnaad Sep 21, 2020 4:38PM ET
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Lol
 
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