Stock market today: Dow Jones and oil fall as Covid fears take hold of Europe as technology soars

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Current chairman Jerome Powell is seen as likely to be reappointed as head of the Federal Reserve.

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Tech stocks popped up on Friday, while the


Dow Jones Industrial Average

fell and bond yields fell alongside a further rise in Covid-19 cases.

By midday, the Dow Jones fell 174 points, or 0.5%, after the index fell 60 points on Thursday to close at 35,870.


S&P 500

was up 0.2% after the index closed at an all-time high on Thursday. Heavy technology


Nasdaq Composite

increased by 0.7%.

The 10-year Treasury yield fell to 1.53% from a Thursday close of 1.61%. This is a sharp drop for one day, taking it even further than its peak of 1.7% in the second half of 2021, reached at the end of October.

This bodes well for the tech trade. Lower bond yields make term profits more valuable – and fast-growing companies in the industry expect a large chunk of their profits to occur many years from now.

In line with this, the S&P 500 outperforms the Dow Jones due to its focus on technology. Outside of tech, stocks have had a rough day; nearly 60% of S&P 500 stocks were in the red, according to FactSet.

Ultimately, market participants are rushing to safety on Friday. The lower yield means investors buy the bond, pushing the price up. It comes as new cases of Covid-19 multiply in Europe, prompting Austria to announce closures from next week.

Economic data from Germany has also not helped investors take risks. The countries’ producer price index gained 3.8% on a month-over-month basis, above the expected 1.9% and above the previous result of 2.3%. Such high inflation could force the European Central Bank to raise interest rates, which could stifle economic growth and ultimately lower inflation. ECB President Christine Lagarde said Monday morning that the central bank is currently unlikely to hike rates in 2022. Nonetheless, economic data will help guide monetary policy.

The price of oil has also fallen. WTI crude oil fell 4.2% to $ 75.70 a barrel. It is down 9% from its 2021 high of over $ 84 a barrel reached on November 9.

Oil stocks have also fallen. The


Energy Sector Select SPDR

The fund (XLE) fell more than 3%. It’s down just over 7% since the end of October, when it peaked in 2021.

Overseas, Hong Kong


Hang Seng

The index fell 1.1%, underperforming other Asian stock markets as it was weighed down by a sharp drop in


Ali Baba

(ticker: BABA and 9988.HK) following the Chinese e-commerce giant’s quarterly results on Thursday which showed slower growth. The pan-European


Stoxx 600

fell 0.3%.

Here are five actions in motion on Friday:


intuition

(INTU) stock gained 9.5% after the company announced profit of $ 1.53 per share, beating estimates of 97 cents per share, on sales of $ 2 billion, above expectations of $ 1.8 billion.


Williams-Sonoma

The share (WSM) rose 0.6% after the company reported earnings of $ 3.32 per share, beating estimates of $ 2.56 per share, on revenue of 2.1 billion dollars, higher than expectations of 1.8 billion dollars.


Walk-in locker

The stock (FL) fell 12% even after the company reported earnings of $ 1.93 per share, beating estimates of $ 1.37 per share, on revenue of $ 2.19 billion of dollars, higher than expectations of 2.15 billion dollars.


Nvidia

(NVDA), which was in tears this week – up about 7% in the past five days – was up again, climbing 4%.


Working day

(WDAY) was down 3.1% despite posting better-than-expected earnings on Thursday night.

Write to Jacob Sonenshine at jacob.sonenshine@barrons.com


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