Stock market today: Dow shuts down, but turbulent technology trips the Nasdaq
The market continued its recent split, with cyclical sectors such as Energy (+ 3.0%) and Financials (+ 1.5%) building on yesterday’s gains while mega-stocks. Technological and technological capitalization fell again.
President Joe Biden on Tuesday announced the release of 50 million barrels of oil from the country’s strategic reserves to curb high gas prices. And yet the US crude oil futures jumped up 2.3% to $ 78.50 per barrel, supporting most of the energy sector, particularly exploration and production areas such as Western Oil (OXY, + 6.4%) and EOG Resources (EOG, + 5.8%).
Michael Reinking, senior market strategist for the New York Stock Exchange, outlines three potential reasons for this counterintuitive move:
“First, there is the ‘sell the rumor, buy the news’; second, there is the conviction that this will not have a long-term impact on prices; and finally, there is some concern that this could lead to a confrontation with OPEC +, which has warned that there will be a response if this action is taken, ”he said.
Also on Tuesday, the IHS Market Purchasing Managers’ Flash Index for November showed a slowdown but still strong private sector growth in November, with its reading falling to 56.5 from 57.6 in October. (Any reading above 50 indicates expansion.)
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The rise in Treasury rates – the yield on the 10-year T-note climbed to just under 1.67% – helped maintain financial stocks such as Bank of America (TA, + 2.6%) and JPMorgan Chase (JPM, + 2.4%) at altitude. But they weighed in on tech names like Advanced micro-systems (AMD, -1.7%) and Adobe (ADBE, -1.3%).
The end result was a gain of 0.6% to 35,813 for the Dow Jones Industrial Average, and a more modest improvement of 0.2% to 4,690 for the S&P 500. Technological weakness and a 4.1% shot at You’re here (TSLA), fired the Nasdaq Composite 0.5% less at 15,775.
Other stock market news today:
- Small cap Russel 2000 fell 0.2% to 2,327.
- Gold Futures posted a fourth consecutive loss, falling 1.2% to $ 1,783.80 an ounce.
- Bitcoin eventually gained a foothold, rebounding 3.7% to $ 57,886.03. (Bitcoin trades 24 hours a day; the prices listed here are at 4 p.m. each trading day.)
- Focus on video communications (ZM) collapsed after the video conferencing company announced its profits after Monday’s close. In the third quarter, ZM reported adjusted earnings of $ 1.11 per share on revenue of $ 1.05 billion, two figures higher than analysts’ expectations. However, “revenues for clients with less than 10 employees declined sequentially in the third quarter and are expected to decline again in the fourth quarter,” said Karl Keirstead, analyst at UBS. He also highlighted concerns about deferred revenue for the fourth quarter, after Kelly Steckelberg, Zoom’s CFO, said on the earnings call that segment growth is expected to drop in the mid-1920s into the fourth quarter. after increasing 39% in the third quarter. While the analyst maintained his Neutral (Hold) rating on ZM, he joined several other companies in lowering his price target – in particular, to $ 250 from $ 285. ZM closed 14.7% lower at $ 206.64.
- Best buy (BBY) was another loser after profits, slumping 12.3% in the wake of its results. The big-box retailer reported higher-than-expected adjusted earnings of $ 2.08 per share and third-quarter revenue of $ 11.91 billion and raised its revenue guidance for the full year, expecting now sales are between $ 51.8 billion and $ 52.3 billion compared to its previous forecast of $ 51 billion and $ 52 billion. As for today’s clearance sale? “BBY’s year-over-year comparable sales were disappointing, up only 2.0% as online sales were down 10.2%,” said Kenneth Leon, CFRA analyst Research. “There was also a slowdown in sales of Best Buy’s largest product category, computing and mobile phones.” Leon also pointed to the decline in gross margins in the quarter as he lowered the title to Keep instead of Buy.
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Kyle Woodley had long been AMD and TSLA at the time of this writing.