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S&P 500 Falls for Second Week as Tech Stutters

Stock MarketsMay 21, 2021 04:16PM ET
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© Reuters

By Yasin Ebrahim

Investing.com – The S&P 500 fell for the second week in a row Friday as the rotation from growth to value continued, keeping tech stocks and the broader market in check.

The S&P 500 fell 0.1%, the Dow Jones Industrial Average rose 0.37%, or 124 points, and the Nasdaq Composite slipped 0.48%.

Investors bet that value sectors of the market will continue to outperform growth continued amid ongoing momentum in the economy, pushing financials, energy and industrials higher.

Financials were the best performing sector on the day, with banks including Morgan Stanley (NYSE:MS), SVB Financial (NASDAQ:SIVB) and Citigroup (NYSE:C) in the ascendency.

A climb in Boeing (NYSE:BA), meanwhile, lifted industrials higher amid a Reuters report the aircraft maker is mulling ramping-up output of its 737 MAX jets to as many as 42 jets per month by late 2022.

Energy, meanwhile, was helped by a rebound in oil prices from weakness earlier this week, even as investors fear a wave of Iranian supply is on the horizon as the Islamic Republic inches closer to a nuclear deal.

The economic backdrop continued to support investor bets on a stronger recovery, as manufacturing and services activity, a key drivers of the economic engine, continued to improve.  

Tech, meanwhile, shed gains as growth stocks struggle to find their footing, though managed to avoid a fifth straight week of losses.

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

Apple was under added scrutiny after CEO Tim Cook took the stand for questioning over the company's App Store business model amid an ongoing legal battle with Epic Games.

Chip stocks were flat after strong week of gains, though Nvidia (NASDAQ:NVDA) was up 3% after announcing a 4-for-1 stock split that will need to be backed by shareholders.

The Federal Reserve minutes for its April meeting showed some Fed members were starting to think about tapering bond purchases. The market largely took the comments in their stride as confidence that the Fed will able to lay the ground for a tapering without the tantrum, or sell-off in risk seen previously.

"[I]t was actually healthy for the market [the Fed comments on tapering]," said David Wagner, portfolio manager at Aptus Capital Advisors, in a recent interview with Investing.com.

"This instills faith in the market that the FOMC is not completely dovish and that they can be hawkish, which is a positive from an inflationary perspective."

On the earnings front, Deere (NYSE:DE) and Palo Alto Networks (NYSE:PANW) reported quarterly results that topped analysts expectation, sending their shares up more than 1% and 5%, respectively.

In Washington meanwhile, news broke that the White House has scaled down the size of its infrastructure stimulus package to $1.7 trillion from $2.25 trillion ahead President Joe Biden's meeting with Senate Republics, who are wary of further spending. The proposal is still far off the GOPs counter offer of $568 million.    

S&P 500 Falls for Second Week as Tech Stutters
 

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Comments (5)
Church of Bear Market
Church of Bear Market May 22, 2021 2:48PM ET
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Party is over. Find another hobby than stocks
Chris Sundo
Chris Sundo May 21, 2021 11:24PM ET
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Since March I've been saying 'it's gonna be a sideways market until June'. After all, how can you have a '2nd half recovery' without the market going down first, in big swings?
Tamaki Iwamiya
Tstar May 21, 2021 9:13PM ET
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I think QQQ is testing the March low and S&P500 is also dragged by those large techs.
Drake Rostemi
Drake Rostemi May 21, 2021 6:48PM ET
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It looks like the majority of the tech stocks which were on a full-throttle were not on your radar, Ai, UPST, CRWD, SPCE, FUTU, just to name a few. So, there you have folks, some called it stutters because they were too busy looking at 3 stocks, AAPLE, FB, AMZN so the numbers agree with the title of the article while the rest of us were making money on the rebound.
Janet Thomas
Janet Thomas May 21, 2021 6:48PM ET
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hello I am new here, my name is Janet
michael engel
michael engel May 21, 2021 4:27PM ET
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Hamas blew up US tech in Israel for 11 days.
Janet Thomas
Janet Thomas May 21, 2021 4:27PM ET
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wow, that's not good, sorry I am new here
Vlad Terentev
Vlad Terentev May 21, 2021 4:27PM ET
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Blew up US tech? in Israel? You are "smart"...
 
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