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Summary
- S&P 500 ticked down 0.55%, Dow Jones fell 0.01%, and NASDAQ plunged 2.01%.
- Chinese ride-hailing firm Didi Chuxing aims for a US$100-billion valuation in IPO debut.
- Intel Corp. to spend US$20 billion on new factories for securing chip supplies.
US markets closed lower on Wednesday despite a fightback from economy-linked energy, financial, industrial, and basic material stocks and Fed Chairman Jerome Powell and Treasury Secretary Janet Yellen’s positive statements on the recovery for a second time in their House testimonies.
The S&P 500 ticked down 0.55% to 3889.14. The Dow Jones Industrial Average fell 0.01% to 32420.06. The NASDAQ Composite Index plunged 2.01% to 12961.89, and the small-cap Russell 2000 slumped 2.35% to 2134.27.
Economy-sensitive blue-chip stocks led the rally following Tuesday’s push back, while tech stocks maintained their retreat for a second-straight day. Investors seemed hopeful about value stocks as policymakers see a strong rebound. Both Mr. Powell and Ms. Yellen highlighted the steady progress in the economy and rejected concerns that inflation and bond volatilities could play spoilsport.
Technology stocks have been the hardest hit in the recent bond market volatility as investors swiftly moved to cash-in gains and reinvest in value stocks. Apple (AAPL), Tesla (TSLA), Amazon (AMZN), and Netflix (NFLX) continued their decline on Wednesday.
GameStop stocks (GME) plunged nearly 18 percent on Wednesday after it hinted at a stock sale to finance its e-commerce expansion. The stock has surged over 900 percent so far this year. GameStop Corp. said on Tuesday that it was mulling to increase the size of the share sale planned earlier.
Meanwhile, Chinese ride-hailing company Didi Chuxing aims for a US$100-billion valuation in its IPO debut on the New York Stock Exchange, people familiar with the matter said. The company plans to go public via a SPAC (special-purpose acquisition company) merger. Didi hopes to raise at least US$10 billion in one of the US’ biggest initial public offering since Alibaba’s US$25 billion IPO in 2014.
Uber Technologies Inc said on Wednesday that it is partnering with online pharmacy ScriptDrop to provide drug delivery service across 37 US states. ScriptDrop’s sales had risen amid covid restrictions. Last year, Amazon.com Inc (AMZN) had also launched an online pharmacy.
Intel Corp. said that it plans to spend US$20 billion on building factories to address the ongoing chip shortage that has caused widespread disruptions, especially in the electronics and auto industries. According to CEO Pat Gelsinger, Intel also would prioritize third-party chipmakers to secure supplies.
The announcement followed news that General Motors Co would further cut productions due to the acute shortage in semiconductor chips. The automaker plans to temporarily suspend operations in its Missouri and Michigan plants later this month. Ford Motor has also said that it will limit output at its Kansas City plant, which produces its flagship F-150 pickup, due to the shortage.
The stocks of energy, industrials, basic materials, financials, utilities, consumer non-cyclicals, and healthcare led the rally on Wednesday, while shares of real estate, technology, and consumer cyclicals withdrew sharply.
©Kalkine Group 2021.
Also read: How Wells Fargo CTS Acquisition Will Boost Computershare's Business
Top Gainers
Top performers on S&P 500 included Laboratory Corporation of America Holdings (4.87%), EOG Resources Inc (4.15%), Applied Materials Inc (4.06%), and Phillips (3.86%). On NASDAQ, top performers were Wisekey International Holding AG (100.78%), Aptose Biosciences Inc (66.21%), Hall of Fame Resort & Entertainment Co (38.96%), and Giga Media Ltd (29.60%). On Dow Jones, Chevron Corp (2.68%), Dow Inc (2.12%), Honeywell International Inc (1.74%), and American Express Co (1.72%) were among the leaders.
Top Losers
Top laggards on S&P 500 included ViacomCBS Inc (-23.18%), Discovery Inc (-13.59%), Discovery Inc (-13.41%), ETSY Inc (-9.33%). On NASDAQ, Benitec Biopharma Inc (-41.47%), Cerevel Therapeutics Holdings Inc (-28.94%), Hycroft Mining Holding Corporation (-28.74%), and Support.com Inc (-28.44%) were the losers. On Dow Jones, Dow Inc Nike Inc (-2.89%), Salesforce.Com Inc (-2.54%), Intel Corp (-2.27%), and Walt Disney Co (-2.12%) were the laggards.
Image Source: EODHD/Others, NASDAQ 6-Month price chart, March 24, 2021.
Volume Movers
Top volume movers are Color Star Technology Co Ltd (36.27M), Hall of Fame Resort & Entertainment Co (31.88M), ViacomCBS Inc (21.63M), Cinedigm Corp (19.61M), Aptose Biosciences Inc (19.22M), Apple Inc (18.70M), Sundial Growers Inc (18.53M), Intel Corp (18.19M), Wisekey International Holding AG (14.49M), Genius Brands International Inc (13.33M), Carnival Corp (11.25M), General Electric Co (10.83M), Ford Motor Co (10.52M), Advanced Micro Devices Inc (9.27M), Cisco Systems Inc (9.24M), Microsoft Corp (8.79M), and American Airlines Group Inc (8.34M).
Futures & Commodities
Gold futures were up 0.45% to $1,732.85 per ounce, silver prices dropped 0.23% to $25.168 per ounce, and copper declined 1.30% to $4.0265.
Brent oil futures surged 5.43% to $64.09 and WTI crude gained 5.33% to $60.84 per barrel.
Bond Market
The 30-year treasury bond yields down 1.41% to 2.315, while the 10-year bond yields dropped 1.48% to 1.614.
US Dollar Futures Index rose 0.29% to 92.613.
Also read: Dented Risk Appetite Pushes Greenback to Four-Month High
According to an independent estimate, US factory output has picked up in early March despite supply constraints and cost pressures. Port congestions, which delayed transits, order backlogs, and other disruptions due to covid have added pressure on many industries.
Economists said on Wednesday that the purchasing managers’ index (PMI), a key indicator of the country’s economic health, rose slightly to 59.3 in early March from 58.6 in February, after seeing a drop in January due to the cold snap. Manufacturing accounts for 11.9 percent of the US economy.
