Rebound By Tech Stocks Contributes To Strength On Wall StreetNovember 18, 2020
Following the mixed performance seen in the previous session, stocks moved mostly higher during trading on Wednesday. The tech-heavy Nasdaq showed a particularly strong move to the upside, although the Dow closed slightly lower.
While the Dow edged down 23.29 points or 0.1 percent to 29,397.63, the broader Nasdaq and S&P 500 both closed firmly in positive territory. The Nasdaq surged up 232.58 points or 2 percent to 11,786.43 and the S&P 500 climbed 27.13 points or 0.8 percent to 3,572.66.
The strength on Wall Street largely reflected a rebound by technology stocks, as reflected by the jump by the Nasdaq.
The Nasdaq reached a record intraday high in early trading on Monday before coming under pressure and ending the day sharply lower. The index saw further downside on Tuesday, slumping by 2.9 percent over the course of the two days.
The pullback by tech stocks came as upbeat news regarding a potential coronavirus vaccine led traders to cycle out of stocks that benefited from the lockdowns imposed as a result of the pandemic.
Traders seemed to shift back into those stocks in today’s trading, with Zoom (ZM), Amazon (AMZN), and Apple (AAPL) posting notable gains on the day.
Meanwhile, traders cashed on the rally by cyclical stocks seen over the past two sessions, contributing to the modest pullback by the Dow.
Overall trading activity was somewhat subdued due to the Veterans Day holiday, as banks and the bond markets were closed and no major U.S. economic data was released.
Semiconductor stocks showed a substantial moved back to the upside on the day, with the Philadelphia Semiconductor Index spiking by 3.7 percent after plunging by 4.2 percent over the two previous sessions.
Bargain hunting also contributed to considerable strength among software stocks, as reflected by the 2.7 percent jump by the Dow Jones U.S. Software Index.
Retail stocks also showed a strong move to the upside on the day, driving the Dow Jones U.S. Retail Index up by 1.8 percent.
Meanwhile, airline stocks gave back ground, with the NYSE Arca Airline Index tumbling by 3.5 percent. The index edged slightly lower on Tuesday after soaring to a five-month closing high on Monday.
Chemical, banking and oil service stocks are also seeing notable weakness, partly offsetting the strength in the aforementioned sectors.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index jumped by 1.8 percent, while China’s Shanghai Composite Index fell by 0.5 percent.
Meanwhile, the major European markets all moved to the upside on the day. While the U.K.’s FTSE 100 Index surged up by 1.4 percent, the French CAC 40 Index and the German DAX Index rose by 0.5 percent and 0.4 percent, respectively.
The bond markets were closed on the day due to the Veterans Day holiday. In the previous session, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.4 basis points to a nearly eight-month closing high 0.972 percent.
Economic data may attract some attention on Thursday, with traders likely to keep an eye on reports on weekly jobless claims and consumer price inflation.
Trading may also be impacted by remarks by Federal Reserve Chair Jerome Powell, who is due to speak on a policy panel at the European Central Bank Forum on Central Banking virtual event.
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