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S&P 500 Ends Week in Red Despite Signs Tech, Value Can Co-Exist

Stock MarketsMay 14, 2021 04:10PM ET
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© Reuters

By Yasin Ebrahim

Investing.com – The S&P 500 ended the week in the red Friday despite a rebound in tech and a rally in economically-sensitive value stocks amid optimism the consumer remains in good shape to support the recovery.

The S&P 500 rose 1.49%, the Dow Jones Industrial Average added 1.06% to 360 points, and Nasdaq Composite gained 2.3%. The weekly loss for the broader market followed a wobble early this week, when fears of runaway inflation prompted investors to hit pause on the stocks.

Retail sales were flat in April, after an upwardly revised 10.7% jump in the prior month as spending fueled by stimulus checks dried up. But with consumers hoarding record amounts of cash, further progress on the reopening of the economy will see spending return in the spring and summer.

"Stimulus checks were mostly used up in March spending, but households now hold larger savings than they did pre-pandemic," Yelena Maleyev, an economist at Grant Thornton said in a note.

"New CDC guidance saying that vaccinated people no longer need to wear masks, added to more states reopening in May, will lead to more consumer activity during the spring and summer months," Maleyev added.

Consumer spending, which makes up two-thirds of the economy, has been earmarked by some as the key to sustain the broader market rally, particularly in cyclicals corners of the market, as the support from monetary and fiscal stimulus will eventually be reined in.

"Going forward, as federal stimulus runs dry, consumer spending will be reliant on more organic means such as job and income growth," Stifel said.

Cyclicals including financials, consumer discretionary and energy were in the green, with energy leading the pack, up more about 3% amid rising oil prices.

Marathon Oil (NYSE:MRO), Occidental Petroleum (NYSE:OXY) and HollyFrontier (NYSE:HFC) were among the biggest gainers, up more than 6% on the day.

The reopening trade was also in vogue, supported by airlines and cruise lines up strongly.  

Tech stocks, meanwhile, continued to make gains as their recent rout appears to have made their valuations, which are sensitive to a faster pace of inflation, more palatable.

Facebook (NASDAQ:FB) was up 3%, Google-parent Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT) and Amazon.com (NASDAQ:AMZN) gained more than 2%, while Apple (NASDAQ:AAPL) ended up about 2% higher.

Tesla (NASDAQ:TSLA), the sixth biggest weighting on the S&P 500, was up 3%.

On the earnings front, meanwhile, high-flying tech names including Airbnb and DoorDash that had been battered recently returned to investors' shopping lists.

DoorDash (NYSE:DASH) raised its outlook on order value for the rest of the year after reporting earnings that missed, but revenue that topped analysts' estimates. Its share price rose more than 22%.

Airbnb (NASDAQ:ABNB) reported better-than-expected quarterly revenue, and said bookings were gaining momentum as the global travel restrictions ease, sending its shares 4% higher.

Walt Disney (NYSE:DIS) slipped 2.6% after its subscriber numbers and revenue during the first quarter fell short of analysts' estimates, casting some doubt among investors whether there is too much optimism baked into the expected growth of its streaming service, Disney+.

"We expect the DTC [Direct to Consumer] narrative to take a breather for a brief period … [but] moving beyond this hiccup … we continue to see the path to growing total DTC subs from 159mm today to 300-350mm by FYE-24 as structurally sound," RBC said.

S&P 500 Ends Week in Red Despite Signs Tech, Value Can Co-Exist
 

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Comments (8)
Javier Escamilla
Javier Escamilla May 14, 2021 6:20PM ET
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My only savings are what i have with my brokers lol and i moved pretty much everything to bonds and international stocks today (more of a conservative portfolio). The consumer spending report was bad regardless of how pretty you all want to make it seem. It was flat and prices for groceries have gone stupidly high. Furthermore, new hires are being offered more money than what current employees make and those employees that have been loyal to their companies are leaving to the competition for a better pay (hard to find employees now in days; gotta thank the market though for the early retirements)
Larry DeAngelis
Larry DeAngelis May 14, 2021 5:41PM ET
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The only thing that is transitory is the reopening
Atlantic Coast Money
Atlantic Coast Money May 14, 2021 4:58PM ET
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Total bull trap today. Until correction fully completes, short sell the rallies. Still bearish pattern with bear market rallies to trap noob bulls. Obviously, inflation does not just go away. Obviously rates will be raised sooner than later to stop the inflation. Obviously semi chips will not magically fall from the sky. All auto manufacturers see a shortage persisting or creating setbacks for next 12-18 months. These are facts. Dont believe the msm headlines trying to lasso more bulls in. Patience is a virtue. Charts dont lie. We are slowly grinding down. The grind will accelerate with the Fed meeting in mid June when they address rates to curb inflation. Be patient. Stay in cash until the dust settles.
Erminio Deangelis
Erminio Deangelis May 14, 2021 4:58PM ET
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it all depends on the time frame. the charts are screaming oversold. buy the dip. then sell when the charts get hot again. If I would have held my positions 20 years ago I'd be filthy rich. LT investor hodl
Larry DeAngelis
Larry DeAngelis May 14, 2021 4:58PM ET
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Great last name
Jari Mustonen
Jari Mustonen May 14, 2021 4:58PM ET
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12 months? We investors look beyond that so basically u are saying that we have priced that in and are clear now.
Shiwoah Lulz
Shiwoah Lulz May 14, 2021 4:57PM ET
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Where is Mitchell Pioneer and his Fed Ponzi Scheme copypasta, today’s price movement is perfect for his inputs
michael engel
michael engel May 14, 2021 4:45PM ET
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QQQ short covering, bs. Closed on dma50.
Steffen vdm
Steffen vdm May 14, 2021 4:39PM ET
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Stocks high, unemployment high, debt high, cryptos high, inflation high, commodities high, everything and everybody is high. Hallelujah!
NUNO LOUREIRO
NUNO LOUREIRO May 14, 2021 4:39PM ET
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Awesome... It's a Magical world
Rafael Undurraga
Rafael Undurraga May 14, 2021 4:39PM ET
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It's a crazy world...but the medicine will be worst than the illness
Rafael Undurraga
Rafael Undurraga May 14, 2021 4:34PM ET
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Incredible that with the actual indicators we still having this kind of days...With an Historical inflation ahead, the markets still going up with the help of the FED, so the question it's, when the money machine will turn off? Will stop when the problem that we will face be worst than actual solution?? They are not responsible of the future, they just want bread for today and unger for tomorrow...
Konstantinos Zoul
Konstantinos Zoul May 14, 2021 4:34PM ET
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cover your shorts and stop whining
Ольга Мишина
Ольга Мишина May 14, 2021 4:34PM ET
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То
Mohammed Juwel Islam
Mohammed Juwel Islam May 14, 2021 4:31PM ET
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Hi how are you
Olivia Lorenço
Olivia Lorenço May 14, 2021 4:31PM ET
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olivia
Olivia Lorenço
Olivia Lorenço May 14, 2021 4:31PM ET
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olivia
Shiwoah Lulz
Shiwoah Lulz May 14, 2021 4:31PM ET
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This is a comment section for finance, not tinder. Get laid some place else bruv
 
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