Wednesday, October 20, 2021

Records In Sight

 

By Nicholas Jasinski |  Wednesday, October 20

On the Cusp. The Dow Jones Industrial Average traded in record territory today, but just couldn't hold on until the close. The index finished the day up 0.4%, at 35,609, just 16 points below its all-time high set on August 16. At its highs of the day, the Dow hit roughly 35,670—an intraday record.

The S&P 500 likewise rose 0.4% today, for its sixth-straight gain. It's now just 0.02% below its own record high. Just like that, investors seem to have shaken off their multitude of worries from over the past month. Once again in this bull market, buying the dip has been a winning strategy.

There's also a maxim on Wall Street about stocks climbing a wall of worries that seems apt: Supply chain woes and inflation in commodity prices, China's Evergrande real estate shock, imminent Federal Reserve tapering, the Delta variant of Covid-19, politicians in Washington who can't agree on anything...investors have had plenty to worry about lately, and stocks are nonetheless at the cusp of records again. The Dow had barely lost 5% from its August high at the worst of the recent volatility.

Strong earnings from cyclically oriented companies were among the catalysts for today's gains. But sector performance suggests investors playing a bit of defense too: S&P 500 utilities stocks were the biggest winners of the day, up 1.6%, followed by real estate and health care, each up about 1.5%.

Growth stocks had a worse day: The S&P 500 technology sector lost 0.3%, and consumer discretionary shares slipped 0.1%. Those declines weighed on the Nasdaq Composite, which gave up an earlier gain to tick down less than 0.1% on the day. It has 1.6% to rise to set a record.

Bitcoin, meanwhile, traded at nearly $67,000 today—its own record level after an 11% rally in the past three days. After yesterday's launch of the first exchange-traded fund linked to Bitcoin, investors could purchase options tied to that ETF as of today.

Tomorrow will be another busy day of earnings, and a chance for major indexes to notch all-time highs. AT&T, Freeport-McMoRan, IntelSouthwest Airlines, Nucor, American Airlines Group, Snap, and Chipotle Mexican Grill will be among the day's many highlights.

 

 


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