Stocks on Wall Street closed near break-even on Friday as investors sold technology shares that have rallied through the COVID-19 pandemic and rotated into cyclical stocks set to benefit from pent-up demand once the pandemic is subdued.
Industrials led rising sectors in the S&P 500, spurred by a 9.9 percent surge in Deere & Co and Caterpillar Inc’s 5 percent gain to an all-time peak of US$211.40 a share.
Financials, materials and energy, along with industrials, rose more than 1 percent.
Photo: Reuters
The S&P 1500 airlines index jumped 3.5 percent, with post-pandemic travel in focus.
The stay-at-home winners, including Microsoft Corp, Facebook Inc, Alphabet Inc’s Google and Netflix Inc, fell in a trend seen for most of the week.
Amazon.com Inc also fell, as investors sold the leaders in the big rally since March last year.
Value stocks rose 0.6 percent, while growth fell 0.6 percent. Advancing stocks led declining shares by about a ratio of two to one.
A battle continues between tech-led growth stocks and cyclicals, companies that are heavily affected by economic conditions, said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.
“When the economy is roaring, they’re roaring. When the economy is weakening, they’re weakening,” Ghriskey said of cyclicals. “The economy will roar, at least for a period of time. There’s huge pent-up demand, whether just for travel or going back to work.”
The Dow Jones Industrial Average edged up 0.98 points, or 0 percent, to 31,494.32 and the NASDAQ Composite added 9.11 points, or 0.07 percent, to 13,874.46. The S&P 500 dropped 7.26 points, or 0.19 percent, to 3,906.71.
Volume on US exchanges was 13.47 billion shares.
Healthy earnings, progress in COVID-19 vaccination rollouts and hopes of a US$1.9 trillion federal coronavirus relief package helped US stock indices hit record highs at the beginning of the week.
The Dow Jones hit an all-time intraday peak, led by Caterpillar, after Deere raised its earnings forecast for this year.
Deere reported that profit more than doubled in the first quarter on rising demand for farm and construction machinery.
The benchmark S&P 500 and the tech-heavy NASDAQ posted their first weekly declines this month on concerns over higher stock market valuations, and expectations of rising inflation led to fears of a short-term pullback in equities.
For the week, the Dow rose 0.11 percent, while the S&P 500 fell 0.71 percent and the NASDAQ slid 1.57 percent as big tech sold off.
Bank of America expects a more than 10 percent pullback in stocks, which are trading at more than 22 times 12-month forward earnings, the most expensive since the dot-com bubble of the late 1990s.
“What we saw [this week] represents a market that is tired and may not do very much. So we are headed for some sort of a pullback, but I don’t think we’re there just yet,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
On the economic front, data showed that IHS Markit’s flash US composite purchasing manager’s index, which tracks the manufacturing and services sectors, inched up to 58.8 in this month.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
Prices of gasoline and diesel products at domestic gas stations are to fall NT$0.2 and NT$0.1 per liter respectively this week, even though international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices continued rising last week, as the US Energy Information Administration reported a larger-than-expected drop in US commercial crude oil inventories, CPC said in a statement. Based on the company’s floating oil price formula, the cost of crude oil rose 2.38 percent last week from a week earlier, it said. News that US President Donald Trump plans a “secondary
RSS