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Wall Street Opens Higher But Tech Underperforms Again; Dow up 150 Pts

Stock MarketsMar 04, 2021 09:45AM ET
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© Reuters.

By Geoffrey Smith 

Investing.com -- U.S. stock markets bounced in early trade on Thursday after a fresh wave of volatility in bond markets eased off, ahead of a speech by Federal Reserve Chairman Jerome Powell. However, they soon lost momentum and were trading mixed within half an hour of the opening.

Powell is due to speak at 12:05 PM ET (1705 GMT), in what will be his last public appearance before the Fed’s next policy-setting meeting. His comments will be parsed for any sign of unease at what has been happening in bond markets lately – having signally failed to show any concern last week in his testimony in front of Congress.

By 9:40 AM ET, the Dow Jones Industrial Average was up 155 points, or 0.5% at 31,425 points, while the S&P 500 was up 0.4%, along with the Nasdaq Composite

Although bonds were stable, money started to flow out of technology stocks again as the morning progressed, with Tesla (NASDAQ:TSLA) stock falling 2.0% to its lowest since late December, NVIDIA  (NASDAQ:NVDA) stock falling 1,6% and Square (NYSE:SQ) falling 5.2%, the market being unimpressed by its decision to buy Tidal, the streaming company founded by rap star Jay-Z.

Earlier, there were grounds for cautious optimism on the labor market, as the Challenger Job Cuts survey showed a drop in February to its lowest level in a year.

The Labor Department’s data on unemployment also showed a 1 million drop in the total number of people claiming jobless benefits through February 13, although a rise in initial jobless claims for the subsequent week provided a note of caution.

Losses were heaviest where valuations had been most stretched after a runaway rally in 2020 on the back after the pandemic drove the Fed to cut interest rates to zero, as well as accelerating many of the long-term structural changes in the economy that are central to tech stocks’ investment cases.

Hydrogen fuel cell company Plug Power (NASDAQ:PLUG) fell 11.2% and is now down 38% over the last month, while the ADRs of Chinese electric vehicle maker Nio (NYSE:NIO) fell another 5.7%, taking their losses to 31% for the month. By contrast, General Motors stock (NYSE:GM) inched down 0.6% after reports that it is to build a second battery factory in the U.S., while Volkswagen (OTC:VWAPY) ADRs rose another 2.3% in the wake of a UBS report that drastically revised upward its estimates of VW’s ability to compete in electric cars.

Energy stocks, meanwhile, were lifted along with crude prices after Saudi Arabia's oil minister Prince Abdulaziz bin Salman indicated in his opening remarks to OPEC's monthly meeting on output quotas that he was against a major increase in output in April, preferring that the bloc "keep its powder dry". Shares in both Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX) rose 1.5%.

Wall Street Opens Higher But Tech Underperforms Again; Dow up 150 Pts
 

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Comments (3)
Gordon Gekko
Gordon Gekko Mar 04, 2021 10:56AM ET
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FB +3% ... is it really underperforming????
Leon Kelly
Leon Kelly Mar 04, 2021 10:56AM ET
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too close to 200ma.. big guys wont let it fall
Art Fire
Art Fire Mar 04, 2021 10:26AM ET
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Looks like the institutions profit harvesting has now impacted the value markets.
Viking Fire
Viking Fire Mar 04, 2021 10:22AM ET
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Tech was king before the pandemic. Tech is king during the pandemic. Tech will be king after the pandemic. This is the start of a tech industrial revolution thats shaping leaders of the next century. getting out at launch point makes no sense
 
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