Monday, November 1, 2021

A Tough Week Ends on A Sour Note

 

By Brian Hershberg |  Friday, September 10

Fall Arrives Early. U.S. stock losses accelerated into the close, ending one of the market's worst weeks in months on a sour note amid a swirl of discordant headlines. 

The day began bright enough, with major indexes climbing following late Thursday news of President Biden's mandate that companies with 100 or more employees either require Covid-19 vaccinations or weekly tests.  Further burnishing the initially bullish run: a bid by Biden and his Chinese counterpart, Xi Jinping, to cool tensions; wholesale inflation news that, while elevated, was roughly in line with expectations; and a hopefulness that recent economic growth concerns would subside. 

Sentiment began to sag, though, as investors digested a Senate Democrat proposal for a 2% tax on the money spent on corporate share buybacks, and then really began their decline late afternoon on news, reported by Bloomberg, that the Biden administration is weighing an investigation into Chinese subsidies. 

The Dow Jones Industrial Average lost 761 points, or 2.2%, on the week. It was the largest weekly decline since mid-June. The S&P 500 shed 1.7% on the week, snapping a two-week winning streak. The Nasdaq Composite fell 1.6%, also snapping a two-week run of gains. 

A number of tech stocks bucked the Friday downturn, Barron's reporter Max A. Cherney notes, after a California judge ruled that Apple must allow developers that distribute apps via its online store to bypass Apple's payment systems. 

Apple, which could lose billions of dollars, fell 3.3%—though some analysts say the risk is limited. Among the gainers: 

Stocks of videogame companies with exposure to mobile offerings jumped as investors anticipated the fresh source of profit the rules change could create. Zynga, which makes a legion of mobile games, soared 9%, and Playtika Holding rose 6.8%. Roblox (RBLX) jumped 3.8%, Activision Blizzard (ATVI) advanced 2.7%, and Electronic Arts (EA) rose 2.7%.

Still, not even that passel of tech gainers could lift the sector out of the red as all 11 S&P 500 sectors declined Friday.

So long, summer rally. Here's hoping for a short fall. 

 

 


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