Stock Market Today 9/24/20: Tech Props up a Tepid Market
A roller coaster session managed to finish in positive territory thanks to some big-name tech stocks.
A roller coaster market rebounded Thursday from yesterday's selloff as rising tech stocks more than offset another day of concerning economic news.
Today's disappointing data came in the form of jobless claims. First-time applications for unemployment benefits ticked higher this week, which was taken as another indication that the economic recovery is slowing down.
Investors responded by piling into big stocks with outsized profit prospects such as Apple (AAPL), Microsoft (MSFT) and Google-parent Alphabet (GOOGL). Indeed, Apple and Microsoft, with gains of 1% and 1.3%, respectively, were among the Dow's top gainers. Google, for its part, chipped in with a 1% rise in shares.
The tech sector may be doing comparatively well this year, but broader market sentiment continues to be a challenge, market strategists say.
"The explosive growth numbers seen earlier this summer – in housing, industrial production, retail sales and elsewhere – have moderated to more-normal levels," says Argus Research. "Stock market optimism has faded, though within the context of a typically down market month. Investors approach what has historically been the best quarter for stocks echoing the uncertainty they felt during the first quarter."
The blue-chip Dow Jones Industrial Average finished the session up 0.2% at 26,815.
Other action in the market today:
- The Nasdaq Composite inched up 0.4% to 10,672.
- The S&P 500 added 0.3% to 3,246.
- The small-cap Russell 2000, up 0.02%, was essentially unchanged at 1,451.
- The yield on the 10-year Treasury Note ticked down to 0.667%.
Don't Sleep on Inexpensive Dividend Payers
It used to be that investors bought tech stocks for their potential for price appreciation, not income. But that changed quite some time ago. Indeed, two of Thursday's Dow stocks to finish in positive territory -- Microsoft and Apple -- are now generous dividend payers. Heck, with the exception of Salesforce.com (CRM), every tech stock in the Dow pays a dividend.
That helps explain, in part, why so many billionaire investors love these stocks, to say nothing of them being some of hedge funds' favorite picks. But one knock on some of the best-known tech dividend payers is that they sport high nominal share prices.
True, if you're looking to bet smaller sums on dividend names, you could always buy fractional shares. But another solution is to invest in cheap dividend stocks that go for, say, less than $15 a share. Happily, there's no shortage of dividend stocks with low nominal share prices, and the tech sector is just one place they can be found.