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By Alex
Eule | Wednesday, March 3 Inverse
Relationship. Bonds have become
the main event for the stock market, and today was no exception. Stocks were
were down substantially for a second straight day. The Nasdaq
Composite fell 2.7%, giving the tech-heavy index a
two-day decline of 4.3%. The S&P 500 was off 1.3%. The declines
came despite more good news on the vaccine front after President Joe
Biden said
there should be enough Covid-19 vaccines for all
American adults by the end of May, a two-month acceleration from
the prior timeline. But as
we've written several times lately, the dynamics of the bond market currently
mean more to investors than virus-related trends. With today's selloff,
the S&P 500 is now down slightly since U.S. daily cases
peaked at 312,000 on Jan. 8. That continues a strange inverse relationship
for stocks and virus cases. Tech stocks
are on the verge of a correction, usually defined as a 10% drop. The
Nasdaq is down 7.8% from its all-time high in mid-February. Rising
rates hurt the present-day value of future earnings, the basis of most
tech trading. The 10-year
Treasury yield finished the day up six basis points, to 1.47%, nearly back to
last week's level. Cloud stocks
and stay-at-home plays were hit particularly hard. Eric
Savitz highlighted three cloud-focused
ETFs that were each down 5%
or more. Meanwhile, Peloton
Interactive and telemedicine firm Teladoc were down 8.4% and 6.7%, respectively. Not
surprisingly, the tech names gaining ground today were direct beneficiaries
of re-opening trends. Lyft was up 8.2% after the ride-sharing
company said that the last week of February was its best
week for ridership since March 2020. Rival Uber rose 2.7% on the news. The latest
jobs data might have also poured some cold water on the market. A report from
payroll processor ADP showed that the economy added 117,000
private jobs in February. Economists were expecting 225,000. The data could
be a preview of the government's own jobs report Friday. Matt
Klein has
more on what to
expect from those numbers. |
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DJIA: -0.39% to 31,270.09 The Hot
Stock: Lumen
Technologies +7.3% Best Sector:
Energy +1.5% |
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