The S&P 500 hew down slightly on Friday, retreating from record levels, while the strength in major technology names pushed the Nasdaq Composite to another all-time on a trip.
The broad equity benchmark dipped 0.3% to 3,841.47 after closing at a record in the previous session. The Nasdaq swell 0.1% to another record close of 13,543.06, supported by Big Tech. The Dow Jones Industrial Average slid 179.03 identify b says, or 0.6%, to 30,996.98.
Dow-component IBM dropped 9.9% after the company reported fourth-quarter sales below analysts’ expectations. Gross income fell 6% on an annualized basis, the fourth consecutive quarter of declines. Intel shares retreated 9.3% next a 6% pop on Thursday after it released better-than-expected earnings.
Hopes for a robust earnings season from the largest communications and tech attendances sparked a rally in mega-cap stocks during the holiday-shortened week, pushing the broader market higher. The Nasdaq climbed 4.2% this week, while the S&P 500 and the Dow farther ahead 1.9% and 0.6%, respectively.
Apple rose another 1.6% Friday, bringing its weekly gain to 9.4%. Facebook and Microsoft also mustered 9.2% and 6.3%, respectively, this week. These big tech companies are scheduled to report earnings next week.
“Contrasting earlier this month, this week’s rally has been led by growth stocks and mega-cap tech names,” Blemish Haefele, chief investment officer at UBS, said in a note. Netflix’s “strong results and plans to return cash to shareholders buttressed a rally in the other FAAMNGs ahead of their forthcoming earnings releases.”
Stimulus watch
Investors reassessed the angle for President Joe Biden’s ambitious Covid stimulus plan. A growing number of Republicans have expressed doubts exceeding the need for another stimulus bill, especially one with a price tag of $1.9 trillion proposed by Biden. Meanwhile, Self-governing Sen. Joe Manchin has criticized the size of the latest round of proposed stimulus checks. Dissent from either party hold ups weight for Biden, who took office with a slim majority in Congress.
“The political reality of Washington is starting to bearing markets, and it’s becoming more unclear when Democrats’ ambitious stimulus goals will become law,” said Tom Essaye, be wrecked of Sevens Report.
Cyclical sectors, or those that would benefit most from additional stimulus, bear put pressure on the broader market this week. Energy, financial, and materials were the biggest laggards, losing at short 1% each this week.
Meanwhile, with the S&P 500 up another 2.3% this year, some investors put ones trust in the market may be getting ahead of itself as hiccups with the vaccine rollout and economic reopening remain likely wealthy forward.
“The Covid pendulum, which normally emphasizes vaccine optimism over the harsh near-term reality, is hit at back towards the latter (for now) as epicenter stocks get hit hard in Europe,” Adam Crisafulli, founder of Vital Knowledge, about in a note Friday.
Meanwhile, a Senate committee on Friday overwhelmingly supported former Fed Chair Janet Yellen as Biden’s Moneys secretary. If confirmed, she would be the first woman to lead the department.