Stock Market Today: Tech Puts In Another Day of Heavy Lifting

A 26% gain Wednesday from soon-to-be Dow component (CRM) helped tech lead yet another market rally.

(Image credit: Getty Images)

The looming landfall of Hurricane Laura, a Category 4 storm expected to hit Louisiana and Texas, weighed on various parts of the market Wednesday, including energy, which was the day's worst sector with a 2.1% loss.

But – yet again – enthusiasm in large-cap technology and tech-esque stocks continued to bail out the larger indices.

Customer relationship management firm (CRM, +26.0%), which will be added to the Dow Jones Industrial Average next week, spiked after it announced it had more than doubled its quarterly adjusted profits and raised its annual revenue outlook.

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"As the data points around accelerating digital transformation continue to pile up, there are few better positioned to help with customer facing efforts than Salesforce," writes Canaccord Genuity analyst David Hynes Jr., (Buy), who raised his price target from $200 per share to $270. "We take comfort in the business' diversity – in terms of both customers (across vertical and size) and product (sales, marketing, service, commerce, analytics, etc.) – and from an investment standpoint, even at all-time highs, we find CRM's valuation comparatively attractive in an expensive space.

Netflix (NFLX, +11.6%), Facebook (FB, +8.2%) and Tesla (TSLA, +6.4%) were among other technology-facing companies exploding higher on Wednesday.

Dick's Sporting Goods (DKS, +15.7%) was one of the strongest non-tech stocks of the day; shares jumped on news of a 194% surge in online sales last quarter, as well as profits of $3.20 per share that eclipsed expectations of $1.30 per share.

"Similar to (Best Buy) in computers & electronics, DKS is the ‘last man standing’ in sporting goods following the bankruptcies of Sports Authority, Modell's, etc.," writes CFRA analyst Camilla Yanushevsky, who reiterated her Buy rating and raised her price target on shares from $45 to $60. "(Dick's) robust omni solutions (curbside; most orders two business days) with further enhancements are set to rival AMZN. Also, DKS has margin-enhancing traffic drivers like experiences, private labels, and removal of hunt."

The Nasdaq Composite led the major indices with a 1.7% leap to a record 11,665, while the S&P 500 (+1.0% to 3,478) also set new highs. The Dow closed up 0.3% to 28,332. And the small-cap Russell 2000 declined 0.7% to 1,560.

Tech Stocks: Too Hot to Handle?

Technology companies have been the month's top performers, with 10.5% gains in August, and they're easily the best group of 2020 at a nearly 33% climb. They've helped carry the broader market, and even Warren Buffett, whose Apple (AAPL) allocation has swollen to more than 44% of his equity portfolio.

However, further improvements in the economy could begin to weigh on technology.

"Tech companies that have benefited from the pandemic could face headwinds," writes BCA Research, which sees a definite short-term threat to e-commerce stocks. "It is likely that the dismantling of lockdown measures – hopefully facilitated by the release of a vaccine later this year – will bring back some spending to brick-and-mortar stores. This could produce a temporary air pocket in sales for online sellers, a risk that does not seem to be fully discounted."

Does that mean the sector's best days will soon be behind it? Given the longer-term trends fueling their rises, that seems unlikely; even BCA acknowledges "there is little doubt that we are still in the midst of a secular transition towards e-commerce."

But it might mean building a wish list of tech plays to buy on the sector's next pullback rather than dive in head-first right now. One area in particular to target is cloud computing stocks, which have run up big as America digitized work, school and play in the face of the pandemic. They could be ripe for short-term profit-taking whenever Wall Street starts to chase recovery picks.

Kyle Woodley was long FB as of this writing.

Kyle Woodley
Senior Investing Editor,

Kyle is senior investing editor for As a writer and columnist, he also specializes in exchange-traded funds. He joined Kiplinger in September 2017 after spending six years at, where he managed the editorial staff. His work has appeared in several outlets, including U.S. News & World Report and MSN Money, he has appeared as a guest on Fox Business Network and Money Radio, and he has been quoted in MarketWatch, Vice and Univision, among other outlets. He is a proud graduate of The Ohio State University, where he earned a BA in journalism.