Fading rebound in tech leaves U.S. stocks mixed
Major U.S. stock indexes closed mixed Wednesday after an early technology company rebound faded, tempering the market’s recovery from a sell-off a day earlier.
The S&P 500 eked out a 0.1% gain after having been up 0.7% in the early going. The Dow Jones Industrial Average managed a 0.3% gain, while the tech-heavy Nasdaq slid 0.4%.
Financial and energy stocks helped keep the S&P 500 out of the red. JPMorgan Chase rose 1.3% and Exxon Mobil added 3%. Losses for retailers and other companies that rely primarily on consumer spending kept those gains in check, as did a pullback in utilities.
Technology stocks, which led the market’s blockbuster rebound in 2020, fell for the seventh straight day. The sector, one of 11 in the S&P 500, is up 4.6% this year, the thirdsmallest gain in the index after consumer staples and utilities. Energy companies are faring the best with a 38.1% gain so far this year.
The market’s mixed results came as investors remain focused on earnings reports, which have been better than expected. More than half of the companies in the S&P 500 have reported their results so far this earnings season, which show profit growth of 54%, according to FactSet.
“It’s been a pretty torrid pace in terms of earnings right now, but not everyone is being rewarded,” said J.J. Kinahan, chief strategist with TD Ameritrade. “To have your stock at least do OK during earnings season: No. 1 beat on revenue and No. 2 talk about a bright rest of the year trend.”
The S&P 500 added 2.93 points to 4,167.59. The benchmark index hit an alltime high last Thursday. The Dow rose 97.31 points to 34,230.34, while the Nasdaq dropped 51.08 points to 13,582.42. The Russell 2000 index of small-company stocks lost 6.92 points, or 0.3%, to 2,241.37.
Stocks had been mostly pushing higher on expectations of an economic recovery and strong company profits this year as largescale coronavirus vaccination programs helped people return to jobs and normal activities after more than a year of restrictions. Massive support from the U.S. government and the Federal Reserve, and increasingly positive economic data, have also helped put investors in a buying mood, keeping stock indexes near their alltime highs.
Still, investors remain concerned about the potential for higher inflation, signs of which are already cropping up in higher prices for oil, lumber and other commodities. Remarks by Treasury Secretary Janet Yellen suggesting the Federal Reserve would have to raise interest rates to keep the economy from overheating led to a late-afternoon sell-off Tuesday.
Ms. Yellen downplayed those remarks, and several Fed officials followed suit Wednesday, which helped boost stocks, said Steve Chiavarone, equity strategist at Federated Investors.
“A combination of decent [economic] data, continued good earnings and a coordinated apology tour were enough to get markets to move back in an upward direction,” he said.
Facebook shares fell 1% after the company announced its independent oversight board would continue to ban former President Donald Trump from the platform. Mr. Trump’s account had been suspended indefinitely after the Jan. 6 insurrection at the Capitol, where his rhetoric has been blamed for the riots. The board did say the company must decide if the ban is permanent.