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Michael Haddad
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Call it a return. After spending a good part of the day in the red, the Dow came back to finish in positive territory on Monday. Nasdaq, however, continued to decline as investors turned away from technology stocks. Square dropped after a bearish analyst expressed skepticism about the company's latest move. Today After the bell, we …
- … wonder if this is the case for technology:
- … Explain why Arconic has climbed to the top of the S & P 500;
- … and point out that Salesforce.com has fallen to the bottom of the index.
Tech is shipwrecked
A bad day turned out to be less dark – unless you're a techie.
the
S & P 500
finished little changed, but down, to 2884.43, while the
Dow Jones Industrial Average
increased by 39.73 points, or 0.2%, to 26,486.78. the
Nasdaq Composite
dropped 0.7% to 7735.95.
The Dow had lost up to 223.96 points, or 0.8% earlier in the day, but made a comeback to end its two-day losing streak. But there is no need to hide the fact that the technology was very, very weak. the
S & P 500 Information Technology
the index fell by 1.2%, companies like
Autodesk
(ADSK) and
Cadence design system
(CDNS) fell by more than 3%.
The question is whether the market as a whole can handle the weakness of the technology. At the moment, you see the same combination of defense and gambling for higher rates, which keeps the overall market stable, as we discussed last week. But it would be nice to see technology and Nasdaq make their comeback.
Wall Street is now in the longest bull market in history. How did it happen? WSJ's Ken Brown guides us through the all-time bull race. Illustration of the photo: Heather Seidel / The Wall Street Journal
Jonathan Krinsky, Chief Market Technician at Bay Crest Partnersthink the Nasdaq. He noted that the
Invesco QQQ
The ETF (QQQ) fell by nearly 2% under its Bollinger band but remains above its 200-day moving average. This is what has happened eight more times since 2014, and the exchange-traded fund has gained a median of 3.41% over the next 10 days. Of course, there was a 3.45% drop in 2015, although Krinsky does not seem to care about that. "Yes, it could still be a scenario of August 2015 (we do not think so), but apart from this type of event, we think that buying this weakness rather than the selling will prove to be the right choice, "he writes. .
Morgan Stanley
of the
Michael Wilson is not so sure. He notes that growth stocks, of which technology is an important part, have been able to remain "immune" against higher rates as long as rates do not become too high. But he thinks that this level could have been exceeded last week, when the MSCI World Value Index had its best day against the MSCI World Growth Index since May 2009. "[The] breaking interest rates last week seems to be the tipping point, allowing the bear market to complete its unfinished business in these latest safety ramparts, "he said.
I have the feeling that we will know it soon enough.
The hot stock
Arconique
(ARNC) reached the top of the S & P 500 on Monday, helped by reports that private equity vigilantes would sue the metals maker.
Arconic rose $ 1.56, or 7.1%, to $ 23.40.
People close to the transaction told Reuters that
Blackstone Group
(BX)
Carlyle Group
(CG), Toronto
Onex
Corp.
and the Canada Pension Plan Investment Board have teamed up to present a joint bid on Arconic. However, other bidders could appear, and Arconic plans to decide on a sale later this month, according to anonymous sources.
Since the beginning of the year, Arconic is down 14.2% and down 13.7% in the last 12 months.
The biggest loser
Salesforce.com
(CRM) sank to the bottom of the index, in a context of widespread selling of technologies.
Salesforece.com lost $ 6.42, or 4.1%, to $ 148.65.
There was not a lot of news specific to Salesforce.com, but technology in general was a tough day, with Nasdaq declines greater than those of the S & P 500 and widespread weakness in chipmakers' values social media. pinch.
Salesforce.com has grown 45.4% since the beginning of the year and has grown 54.3% in the last 12 months.
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