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S&P 500 Erases Losses as Dip-Buying in Tech Sparks Turnaround

Stock MarketsNov 24, 2021 03:30PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 cut losses Wednesday, led by a turnaround in tech as investors continued to buy the dip in growth sectors of the market.

The S&P 500 rose 0.2%, but had been down nearly 1% intraday. The Dow Jones Industrial Average was flat, the Nasdaq gained 0.4%.

Tech turned positive to help the broader market cut losses after starting the session on the backfoot as a slew of positive economic data and signs of persistently elevated inflation stoked concerns about sooner monetary policy action from the Federal Reserve.

The Personal Consumption Expenditures price index, the Fed’s preferred inflation measure, was up 0.6% on October, below the 0.7% rate expected, but ahead of prior’s month 0.4%. That took the annualized rate for October to 5%, well above the Fed’s 2% target.

The labor market continues to show progress toward the Fed’s maximum employment goal as jobless claims fell to lowest level since 1969.

The Department of Labor reported Wednesday that 199,000 people filed for unemployment insurance, down 71,000 from the prior week's upwardly revised 271,000. That was well below consensus for claims to fall to 260,000.

Economists, however, shrugged off the huge drop in claims as a one-off, which “were pushed down by a seasonal adjustment quirk,” Pantheon Macroeconomics said.  “It will substantially reverse next week, with claims rebounding to about 250K.”

Energy stocks added to recent gains even as oil prices gave up gains.

Devon Energy (NYSE:DVN), Diamondback Energy (NASDAQ:FANG), Marathon Oil (NYSE:MRO) were among the biggest gainers.

Tesla (NASDAQ:TSLA), meanwhile, moved off session lows to helped consumer discretionary stocks pare losses following a retail-led slide.

Gap (NYSE:GPS) plunged 25% after the retailer slashed its full-year outlook following third-quarter results that fell short of Wall Street estimates as rising costs and supplier chain woes weighed.

Nordstrom (NYSE:JWN) also reported weaker-than-expected quarterly results as rising labor costs dented profit, sending its share price 29% lower.

On the monetary policy front, the minutes of the Fed's November meeting showed that some Federal Reserve policymakers were in favor of a faster pace of bond tapering to provide the central bank with plenty of room to hike rates amid concerns about inflation pressures. 

In another sign that Fed members are growing concerned about inflation, San Francisco Federal Reserve Bank President Mary Daly said Wednesday that she would be open to speeding up the pace of the Fed's bond tapering if inflation remained elevated and jobs growth remained strong.

S&P 500 Erases Losses as Dip-Buying in Tech Sparks Turnaround
 

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Comments (2)
Stan Smith
Stan Smith Nov 24, 2021 4:13PM ET
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Ta Da...losses reversed. Its a miracle!
adomas taujanskas
adomas taujanskas Nov 24, 2021 3:42PM ET
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For now the tech will probably be riding high... But once the market will realize that tech does not do well under stagflation...
 
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