Friday, March 11, 2022

Tech Stocks to Face a Test

 

By Jeffrey Cane |  Thursday, October 21

A Broken Record. After an attempt yesterday that fell just short, the S&P 500 closed today at a record high, its 55th record close of the year. The last one occurred in early September, before the market swooned amid worries about the Delta variant, supply-chain bottlenecks, and the Federal Reserve tapering. It was the longest dry spell without a record close since a 50-day stretch ended Nov. 13, 2020. Ultimately, the benchmark index closed up 0.3% today, to 4549.78, and is up 21.1% on the year.

Records are nice and all, but today's trading was cautious and underwhelming. Jacob Sonenshine of Barron's notes that the Invesco S&P 500 Equal Weight Exchange-Traded Fund, "which weights each stock in the index equally and therefore shows the breadth of stocks rising or falling, ended the day up just 0.1%."

The Dow Jones Industrial Average closed down six points, dragged lower by IBM. Big Blue reported third-quarter revenue of $17.6 billion, shy of Wall Street estimates, and its stock fell 9.6%, contributing a decline of 89 points to the blue-chip index. Still, the Nasdaq Composite advanced 0.6%, and the NYSE FANG+ index gained 1.1%. 

Big Tech will face a much sterner test tomorrow. After today's 4 p.m. close, Snap gave a fourth-quarter outlook that was much weaker than what Wall Street expected, and its stock tumbled 25% in late trading. Facebook, Twitter, Pinterest,  and Alphabet were all lower in Snap's wake. Intel, meanwhile, dropped 9% in late trading after the chip maker missed sales expectations. Better buckle up.

Earlier, other earnings reports were a focus. 

AT&T reported a strong set of third-quarter numbers, but investors weren't buying it, Barron's Nicholas Jasinski reports. “I think everybody has been pretty impressed with the results of AT&T over the last year,” J.P. Morgan’s Phil Cusick told AT&T CEO John Stankey during the company's conference call. “I would only follow up that the market is telling you that investors don’t believe it.” The stock fell 0.6%. 

Match Group led the S&P 500, gaining 10.3%, after Alphabet said that service fees on Google Play would be lowered come Jan. 1. Rival dating site Bumble rose 7.5%, while game platform Roblox  advanced 5.9%.  

Elsewhere, the yield on the 10-year Treasury note edged up to 1.674%.  Gold fell 0.2%, to $1781.20 an ounce. Crude oil declined 1.1%, to $82.50 a barrel. And Bitcoin was lower after its recent high, trading around $62,707.

 

 


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