Wall Street flipped the week's script on Friday, with a cooling-off in interest rates stunting value-oriented stocks while providing much-needed relief for "growthier" names.
The Dow Jones Industrial Average lagged the broader indices with a 1.5% decline to 30,932, while the S&P 500 declined 0.5% to 3,811. The Nasdaq Composite, meanwhile, got a lift from the recently sold-off technology and communications sectors; stocks such as Facebook (FB, +1.2%), Nvidia (NVDA, +3.1%) and Microsoft (MSFT, +1.5%) helped lead a modest 0.6% rebound in the tech-heavy index.
Despite the rebound, the Nasdaq remained down 4.9% for the week, the result of interest-rate fears, versus 1.8% and 2.4% losses for the Dow and S&P 500, respectively.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"Many market participants have referenced the infamous 'Taper Tantrum' in 2013 as a similar playbook to today as a reason why we're seeing equity market weakness," says Brian Price, head of investment management for Commonwealth Financial Network. But he also points out that "the notable difference today ... is that the Fed seems very committed to letting the economy run a little hotter than normal and will tolerate higher inflation."
Other action in the stock market today:
- The small-cap Russell 2000 eked out a marginal gain to 2,201.
- U.S. crude oil futures sank 3.2% to $61.50 per barrel, but still finished February up 18%.
- Gold futures sank, too, dropping 2.6% to $1,728.80 per ounce, plumbing nine-month lows.
- Bitcoin prices, at $48,870 on Thursday, dropped 5.1% to $46,381. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)
Earnings Estimates Are Looking Up!
Whatever the market faces in the short term, analysts see better times further on in the year.
Economic expectations are improving as more Americans are inoculated against COVID-19; nearly 14% of the population has received at least one dose, according to the Centers for Disease Control and Prevention.
That has analysts quickly scaling up their earnings estimates. Current-quarter profit expectations have improved by 5% over the first two months of Q1. According to FactSet Senior Earnings Analyst John Butters, that's "the second-highest increase in the bottom-up EPS estimate during the first two months of a quarter since FactSet began tracking this metric in Q2 2002," trailing only Q1 2018's 5.7% increase.
That augurs well for much of the market – including a number of dividend-rich sectors and industries. Many real estate investment trusts (REITs), especially in the retail and hospitality industries, are poised for better results as foot traffic picks up. And an economic recovery bodes well for business development companies (BDCs), as well as the small and midsized businesses in which they invest.
Investors will find plenty of attractive income opportunities across the equity board – though if you're looking for somewhere to start, we suggest you begin with our list of 21 high-quality (and high-yielding) stocks that are suitable for those looking to retirement (or even in it). These names offer an appealing blend of payout potential and income stability that just about any long-term buy-and-holder can appreciate.
Kyle Woodley was long NVDA and Bitcoin as of this writing.
-
Small Businesses Are Racing to Use AIThe Kiplinger Letter Spurred on by competitive pressures, small businesses are racing to adopt AI. A recent snapshot shows the technology’s day-to-day uses.
-
The Me-First Rule of Retirement SpendingFollow the 'Me-First" rule and you won't have to worry about running out of money when the stock market goes south.
-
Stocks Slide to Start September: Stock Market TodaySeasonal trends suggest tough times for the stock market as we round into the end of the third quarter.
-
If You'd Put $1,000 Into Sherwin-Williams Stock 20 Years Ago, Here's What You'd Have TodaySherwin-Williams stock has clobbered the broader market by a wide margin for a long time.
-
AI Start-ups Are Rolling in CashThe Kiplinger Letter Investors are plowing record sums of money into artificial intelligence start-ups. Even as sales grow swiftly, losses are piling up for AI firms.
-
If You'd Put $1,000 Into UnitedHealth Group Stock 20 Years Ago, Here's What You'd Have TodayUNH stock was a massive market beater for ages — until it wasn't.
-
S&P 500 Tops 6,500 Even as Nvidia Slips: Stock Market TodayThe world's most valuable company closed lower after earnings, but the S&P 500 managed to notch a new record high.
-
Stocks Edge Higher With Nvidia, Fed in Focus: Stock Market TodayThe AI bellwether reports earnings after today's close, while Wall Street is keeping a cautious eye on President Trump's attacks against the Fed.
-
President Trump Makes Markets Move Again: Stock Market TodayThe White House is moving ahead with plans to reshape the Federal Reserve and to buy shares in more sectors and stocks.
-
Stocks Struggle to Start Nvidia Week: Stock Market TodayAnother important week for the stock market starts on a risk-off note.
