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Dow Cuts Losses as Cyclicals Shine to Offset Churn in Tech

Published 06/03/2021, 01:26 PM
Updated 06/03/2021, 02:45 PM
© Reuters.

© Reuters.

By Yasin Ebrahim

Investing.com – The Dow cuts losses Thursday as upbeat labor data spurred a rally in cyclicals, with financials and energy stocks rising to offset losses in tech.

The Dow Jones Industrial Average slipped 0.1%, or 18 points, but had been 265 points down intraday. The Nasdaq Composite slipped 0.61%, and the S&P 500 fell 0.3%.

Signs of a recovery in the jobs market continued to take shape as jobless claims and private job gains data came in better-than-expected ahead of the nonfarm payrolls report due Friday.

The Labor Department reported that 385,000 people filed for unemployment insurance, down 20,000 from the prior week's 405,000 and larger than the 15,000 decline economists had expected.

In a further sign of improvement in the labor market, the economy created 978,000 private jobs in May, well above economists forecast for a 650,000.

The services sector, meanwhile, continued to see a revival as the economy reopens, rising to a record levels.

The pickup in the recovery has stoked expectations the Federal Reserve could start talking about tapering at its next meeting on June 15. 

"With further improvement in the domestic data and rising inflation pressures with the latest read on the PCE over 3%, policy makers are likely to at least begin a discussion of when to begin the discussion of tapering back accommodation, " Stifel said in a note.

The slew of positive data paved the way for a rise in economically-sensitive cyclical stocks, particularly in financial and energy.

Financials were pushed higher by rising banking stocks as investors bet on a favorable backdrop for stocks, with the inevitable steepening in the yield curve as the Fed tightens policy.

Energy stocks were helped by a recovery in oil prices from session lows following a larger-than-expected draw in crude stockpiles.

U.S. crude inventories fell by 5.1 million barrels last week, compared with expectations for a decrease of 2.4 million barrels.

Tech, meanwhile, was a drag on the broader markets as the sector's recent revival appears to running out of steam.

Google-parent Alphabet (NASDAQ:GOOGL), Apple (NASDAQ:AAPL), Amazon.com (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), Facebook (NASDAQ:FB) were in the red.

Chip stocks, which have played a role in the bidding up tech in recent weeks, also faltered down about 1%.

The Reddit meme mania faded somewhat, paced by a 7% decline in AMC Entertainment Holdings Inc (NYSE:AMC). The movie chain company struck an agreement to sell up to 11.6 million shares as it seeks to cash on its recent rally that seen its share price jumped more than 350% in the past month.

GameStop (NYSE:GME) slipped 8%, while BlackBerry (NYSE:BB) was up 4%.

In other news, FireEye (NASDAQ:FEYE) slumped 17% after selling its products business to Symphony Technology for $1.2 billion as the cybersecurity firm seeks to focus efforts on its intelligence and frontline business.

Latest comments

no no it.s not all time high... there is something wrong
money printer go brrr
this economy is a trash, a lot of lies
Lol.. When Amazon and Apple two of the biggest stocks on the exchanges are both showing H&S patterns there is no where to run. Tech wreck will drag cyclicals down too
"DOW Cuts Losses," one of the most prolific headlines in internet news history.  Another 200+ point loss whisked away during a routine round of criminal intervention, as they prepare for a bump into the green "in late trade."  Welcome to the US Ponzi Scheme, greatest financial fraud in history, and biggest investment joke in the world.
ahhahahaaahahahaha
Next reddit stock move is Tilray (TLRY)!! The volume doesn’t lie!!! Just bought 500 shares !
the lack of short interest
How much are you down today???
they will begin to think about when to begin ducussion about when to begin discussions about maybe beginning discussion about thinking of taking about starting taper talks maybe later this year or the first half of 2022.
"begin discussing about when to begin discussing" haha..there is no plan. just throwing sh at the wall
Printer goes brrrrrr and market goes up
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