Perhaps Monday got a little too out of hand.
One of the best market sessions in months was followed by a much more sluggish round of trading Tuesday, though the selling followed the "rotation to value" theme we've discussed in recent weeks.
The tech-heavy Nasdaq Composite (-1.7% to 13,358) and Russell 2000 (-1.9% to 2,231) suffered the steepest drops, while the Dow Jones Industrial Average managed to slip away with a mere 0.5% decline to 31,391.
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Those losses came on a slow news day, though there was another positive development in the global fight against COVID. Days after Johnson & Johnson's (JNJ, -0.2%) single-shot coronavirus vaccine received emergency-use clearance in the U.S., the Washington Post reported that President Joe Biden would soon announce a rare deal that would see competitor Merck (MRK, +0.7%) boost supply by manufacturing more of JNJ's vaccine.
The 10-year Treasury yield also pulled back to 1.41% – another seemingly bullish driver amid a market that had balked at rising rates – but nothing appeared to draw the bulls' interest Tuesday.
Other action in the stock market today:
- The S&P 500 declined 0.8% to 3,870.
- Target (TGT, -6.8%) sharply dropped despite better-than-expected quarterly sales and profits; the company announced that it would reinvest $4 billion annually for years to upgrade technology, refurnish its stores and make other improvements.
- Twitter (TWTR, -5.1%) retreated in response to a $1.25 billion convertible-debt offering.
- U.S. crude oil futures improved by 0.4% to $60.92 per barrel.
- Gold futures gained 0.6%, settling at $1,733.60 per ounce.
- Bitcoin prices dropped 1.5% to $47,563. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)
Yes, Growth Is on the Outs, But ...
While there's a steady drumbeat of news pointing to boom times for value, don't give up on growth entirely.
Regardless of what broad investment trends are currently in favor, certain technological, societal and other developments simply can't be ignored -- and buying into the companies addressing them could be a potent long-term recipe for success, especially when those firms are a bit out of favor.
These 11 growth stocks, for instance, are worth monitoring for dips, as are these 13 growth ETFs, which have the added benefit of diluting risk across dozens of stocks.
Picks ripe for this kind of short-term pain, long-term gain include stocks tethered to the expansion of 5G communications technology. This trend is hardly any secret, and many stocks in the space are actually cooling off after months, even years, of anticipatory gains. But that's good news for new buyers, as many of the benefits from a nationwide 5G rollout will take years to fully realize.
One way to put yourself ahead of the curve is to identify stocks that not only can soar on 5G's updraft, but have other bullish arguments to be made at the moment … such as these seven picks.
Kyle Woodley was long Bitcoin as of this writing.
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