The major indices all retreated on Wednesday, with some of Wall Street's largest corporations bleeding the most.
Washington still can't get its act together on COVID relief: Democratic leaders shot down a $916 billion proposal from the White House, favoring instead a $908 billion bipartisan deal that's still not fully hammered out.
However, the "rotation" away from tech stocks was back on – sellers weren't overly aggressive with the many cyclical names of the Dow Jones Industrial Average, which dipped 0.4% to 30,068, but they sprinted away from mega-cap technology and tech-related firms.
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Facebook (FB, -1.9%) helped lead the Nasdaq Composite (-1.9% to 12,338) lower after a group of 48 state attorneys general filed antitrust lawsuits against the social media firm; Apple (AAPL, -2.1%), Amazon.com (AMZN, -2.3%) and Google parent Alphabet (GOOGL, -1.9%) weighed heavily, too.
Where was that money flowing? Well, housing-related stocks Lowe's (LOW, +5.9%) and Home Depot (HD, +1.5%) attracted buyers Wednesday, as did the initial public offering (IPO) of food delivery service DoorDash (DASH), which rocketed 85.8% higher on its first day of trading.
Other action in the stock market today:
- The S&P 500 shed 0.8% to 3,672.
- The small-cap Russell 2000 closed 0.8% off its lows to 1,902.
- Gold futures joined stocks in their decline, falling 1.9% to $1,838.50 per ounce.
- U.S. crude oil futures slid, but by just 0.2% to settle at $45.52 per barrel.
How to Manage This Rotation
Investors should expect more of the same daily churn, analysts say, as Wall Street hangs on every stimulus-related headline. And they also continue to say that value stocks still have the edge.
"November was also a great month for Value with outperformance relative to Growth across all the size segments," write BofA Global Research analysts. "However, multiples actually expanded more in the Growth benchmarks than in the Value benchmarks across sizes. … This is one reason why we remain bullish on Value: the rally barely made a dent in relative valuations."
That continues to bode well for value stocks and value funds alike.
But investors who are fully allocated can't buy much of anything without raising a little cash, so unless you plan a massive contribution soon, you might need to do a little pruning. These 15 dividend-paying stocks continue to look problematic, according to analyst opinions and fundamental data.
Other stocks are coming up against difficult business environments and other obstacles that could hold them back in the year to come. Sell recommendations can always be dicey in a market as resilient as this one, but these five stocks are best sold or avoided as we turn the calendar to 2021.
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