US STOCKS-Nasdaq declines as tech sell-off resumes; cyclical stocks rise

The Nasdaq index fell in choppy trading on Wednesday as investors continued to sell technology-related stocks, while the S&P 500 and the Dow Jones were supported by cyclical shares on hopes of a quicker economic recovery.

Reuters | Washington DC | Updated: 25-02-2021 11:58 IST | Created: 24-02-2021 21:28 IST
US STOCKS-Nasdaq declines as tech sell-off resumes; cyclical stocks rise
Representative image Image Credit: Wikimedia Commons

The Nasdaq index fell in choppy trading on Wednesday as investors continued to sell technology-related stocks, while the S&P 500 and the Dow Jones were supported by cyclical shares on hopes of a quicker economic recovery. Microsoft Corp, Alphabet Inc, Amazon.com Inc and Apple Inc were down between 0.6% and 1.7% after rising in premarket trading.

"You have the normal concern ... investors who want to protect profits on some of these (growth) stocks, and the investors who were looking for a pullback to re-enter," said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey. "As these two sides participate in the market, you're getting these big swings back and forth, buyers on the dip and sellers when it gets back to higher levels."

Value-oriented stocks have enjoyed a bit of a bounce recently, with the S&P 500 Value index rising for the fourth straight day. The S&P 500 financial sector added 0.9% to hit a record high, while other cyclical sectors including industrials, energy and materials also rose.

Markets were reassured earlier by comments from Federal Reserve Chair Jerome Powell, who on Tuesday pushed back on suggestions that loose monetary policy risked unleashing inflation. The S&P 500 Growth index, housing most of the high-flying technology-related stocks, fell more than 6% in the last six days on valuation concerns as yields on the U.S. ten-year Treasury notes remained elevated.

Tech stocks are particularly sensitive to rising yields as their value rests heavily on future earnings, which are discounted more deeply when bond returns go up. Tesla Inc gained 0.6% after star investor Cathie Wood's Ark Invest fund bought a further $171 million worth of the company's shares in the wake of a sharp fall in the electric-car maker's stock.

At 10:46 a.m. ET the Dow Jones Industrial Average was up 109.64 points, or 0.35%, at 31,646.99, the S&P 500 was up 2.79 points, or 0.07%, at 3,884.16, and the Nasdaq Composite was down 82.46 points, or 0.61%, at 13,382.74. However, all the three main indexes were tracking strong monthly gains, with the Dow and the S&P 500 set for their best month since November.

Advancing issues outnumbered decliners for a 1.12-to-1 ratio on the NYSE and a 1.38-to-1 ratio on the Nasdaq. The S&P index recorded 64 new 52-week highs and no new low, while the Nasdaq recorded 140 new highs and 2 new lows.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)


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