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S&P 500 Cuts Gains as Sluggish Tech Offsets Cyclicals Strength

Published 03/24/2021, 01:32 PM
Updated 03/24/2021, 03:15 PM
© Reuters

© Reuters

By Yasin Ebrahim

Investing.com – The S&P 500 cut gains Wednesday as a bid up in cyclicals following a rout earlier was offset by fall in tech stocks even as bond yields slipped.

The S&P 500 was up 0.13%, the Dow Jones Industrial Average rose 0.74%, or 168 points, the Nasdaq Composite was down 1.22%.

Cyclicals like financials, industrials and energy were racking up gains, with the latter receiving a boost from a rebound in oil prices despite a surprise weekly build in U.S. stockpiles.

Crude oil inventories climbed 1.9 million barrels last week, compared with economists forecasts for a draw of 272,000 barrels.

Parts of the reopening trade – bullish bets on stocks tied to the progress of the economic reopening – eased later in the day, with airlines and cruise lines paring gains. 

United Airlines Holdings (NASDAQ:UAL) and Delta Air Lines Inc (NYSE:DAL) were up less than 1% each. Carnival (NYSE:CCL) and Royal Caribbean Cruises (NYSE:RCL), which had gained more than 4% intraday, turned negative. 

Cruise lines on Wednesday urged the Centers for Disease Control and Prevention to allow a phased renewal of sailings from U.S. ports in early July.

The backdrop of mostly weaker economic data following underwhelming durable goods orders and marketing activity data did little to stifle the climb in cyclicals amid optimism the recovery remains on track.  

"We expect that there will be a broad rebound next month that will reflect a resumption the ongoing rotation into industrial capex investment from tech-oriented orders," Jefferies (NYSE:JEF) said.

Beyond cyclicals, tech stocks were under pressure even as U.S. bond yields continued to retreat, with United States 10-Year yield falling to session lows.

The so-called Fab 5 tech stocks, with exception of Google-parent Alphabet (NASDAQ:GOOGL), were in the red. Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Amazon.com (NASDAQ:AMZN), and Facebook (NASDAQ:FB) fell.

Intel (NASDAQ:INTC), meanwhile, gave up its gains after rising 5% as the chipmaker unveiled a $20-billion spending plan to build two new factories that will bolster the U.S. chip supply chain to some of the biggest firms including Microsoft and Google.

In other news, GameStop (NYSE:GME) fell 26% after the company said it would tap shareholders for more money via an equity offering and reported fourth-quarter results that fell short expectations. The company also failed to provide an update on its plans to pivot to digital. 

Still, Wall Street appears to be warming up to Gamestop's recent jump in valuation. Jefferies upgraded its price target on the stock to $175 from $15, though maintained its hold rating.

The rebound for the broader market comes as analysts caution choppy trade ahead.

" The markets are trying to find their next direction / path here- and will typically trade in a choppy, range-bound manner until they do so," Janney Montgomery Scott said in a note. " Our work currently suggests that despite any oversold rallies ahead, investors should remain on guard for further volatility ahead."

Latest comments

I want want this article is smoking.
Let the miracle "in late trade" begin, as the US Ponzi Scheme, greatest investment fraud in the world, sees the last hour "buyers" come out of the woodwork, predictable as the sunset.
only works in upwards market - clearly reversing trend, only slowing down the correction which is clearly coming any day
Folks with these "fraud" opinions usually are the ones that are the final buyers at the top after having missed every rally for a decade.
rebound? growth crash you mean! everything 5-20% red.
Rebound 😂😁everything tanked avarage 10% and reversed back 1% that is bull and rebound? You want the millennials sucked in... Who's paying you for the article?
It is copy and paste, I do not think they have the skills and the technical competencies to understand what’s going on in the market
Apart from the fact that epidemiologists say a herd immunity of 85% is required to prevent the Kent covid variant from being endemic. Only 20% off but polls say 30% of Americans don't want to take the vaccine. Im afraid covid is here to stay like the flu
Your money is better spent in crypto where hedges and banks cant raid profit until they invest in it. mana, harmony, vethor, strm, btt.
In 30 days or so 200 million in US will be vaccinated, nearly 2/3 of the population. This eliminates the infection rate factor and everyone can go back to living life.
don't believe the hype
I wouldnt call this a rebound.
Choppy, it seems like it goes up the past couple of weeks during the after hours, only to be deminished by hedgies during american trading hours
It feels like , funds are trying to see how much more they can squize from retail investors
They said they have enough money for the transition at the moment, why cause fear by re phrasing? How much did they pay you?
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