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Source: G-Stock Studio, Shutterstock
Summary
- S&P 500 fell 2.45%, NASDAQ dropped 3.52%, and Dow Jones shed 1.75%.
- Industrials, technology, consumer cyclical, energy, and real estate drag down indexes.
- US economy grew at 4.1% in the fourth quarter, manufacturing grew 3.4% in January.
US stock markets ended Thursday’s session lower as new economic data showed slow progress in recovery and investors appeared eager to retreat from high-value stocks to other growth sectors.
The S&P 500 fell 2.45% to 3829.34. The Dow Jones Industrial Average shed 1.75% to 31402.01. The NASDAQ Composite Index was down 3.52% to 13119.43, and the small-cap Russell 2000 dropped 3.69% to 2200.17.
The Labor Department said on Thursday that unemployment claims dropped by 111,000 to 730,000 in the week ended February 20, the highest weekly decline since late November, indicating that the layoffs have been decreasing after edging higher in the winter.
The new data also show that the economy grew by 4.1% in the fourth quarter, while the demand for durable goods maintained an upward curve for the nine-straight months up to January when it increased by 3.4%. Still, Thursday’s lackluster session could be due to fresh concerns on the pace of the economy as the data did not provide a clear-cut indication of a strong rebound.
Investors also appeared to evaluate other stock options besides the blue-chip stocks following their extraordinary gains in the previous year. Also, they may want to cash in from the stock growth and divert some of the money into other growth sectors such as financials and manufacturing.
These economically sensitive stocks can add great value when the overall economy improves, and that may be another consideration for investors trying to rotate their growth stocks. Besides, the rise of SPACs, or the special-purpose acquisition companies, is providing new opportunities to boost their portfolios with low-priced stocks but with high growth potential through the IPO purchases.
Key sectors such as consumer non-cyclicals, utilities, financials, industrials, academic & educational services, healthcare, technology, consumer cyclicals, basic materials, real estate, and energy hit the brakes. All of them had performed strongly in the last session, pulling up the indexes into green.
©Kalkine Group 2021
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Top Gainers
Top performers on S&P 500 included Quanta Services Inc (4.25%), Twitter Inc (3.31%), Cboe Global Markets Inc (3.21%), and L Brands Inc (2.03%). On NASDAQ, top performers were Pandion Therapeutics Inc (133.61%), Chromadex Corp (102.46%), TDH Holdings Inc (30.23%), and Aslan Pharmaceuticals Ltd (26.70%). On Dow Jones, 3M Co (0.73%), Johnson & Johnson (0.20%), Merck & Co Inc (0.07%), and Nike Inc (0.01%) were the volume leaders.
Top Losers
Top laggards on S&P 500 included NetApp Inc (-13.87%), ANSYS Inc (-12.37%), Best Buy Co Inc (-9.43%), and Tesla Inc (-9.19%). On NASDAQ, Collplant Biotechnologies Ltd (-29.65%), The9 Ltd (-27.25%), Rubius Therapeutics Inc (-21.91%), and American Resources Corp (-21.62%) were among the losers. And on Dow Jones, Boeing Co (-5.61%), Intel Corp (-4.27%), Salesforce.Com Inc (-3.92%), and Apple Inc (-3.20%) were among the top laggards.
Image Source: Refinitiv, NASDAQ Composite Index YTD price chart, 25 February 2021.
Volume Movers
Top volume movers included Sundial Growers Inc (44.80mn), Apple Inc (23.06mn), Chromadex Corp (15.72mn), Naked Brand Group Ltd (15.63mn), Workhorse Group Inc (14.86mn), Microsoft Corp (9.51mn), Intel Corp (6.90mn), Cisco Systems Inc (4.45mn), General Electric Co (13.03mn), American Airlines Group Inc (12.08mn), Ford Motor Co (10.35mn), and Advanced Micro Devices Inc (9.93mn).
Futures & Commodities
Gold futures were down 1.50% to $1,770.95 per ounce, silver prices were down 1.85% to $27.345 per ounce, and copper shed 1.82% to $4.2257.
Brent oil futures were down 0.33% to $65.96 and WTI crude edged up 0.24% to $63.37 per barrel.
Bond Market
The 30-year treasury bond yield was up 2.22% to 2.292, while the yield on the 10-year bond was up 9.42% to 1.520.
US Dollar Futures Index was up 0.07% to 90.237.
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However, regardless of the stock performance, the latest labor data is a boon to the markets as positive sentiments would help boost spending as well as business activities.
Reinforcing their belief that the job market is looking up, officials stressed that a spike in the unemployment benefits requests in the previous period was due to many bogus claims.
Besides, the progress in the economy would give investors the leeway to shift their funds to other sectors that have been hitherto under stress or have been underperforming and help them come up in a new COVID-free world.
