The Dow Jones Industrial Average momentarily climbed over the 35,000 mark Monday for the first time in the industrial average's long history. But that accomplishment took second billing to the Nasdaq Composite's nastiest dip in a couple of months.
"Last week there was significant volatility in the growth/tech basket and Friday's disappointing jobs report gave a brief respite to some of this weakness," says Michael Reinking, senior market strategist for the New York Stock Exchange. "However, that has been short lived as these stocks are getting hit very hard again today."
Some were hit for good reason: Facebook (FB, -4.1%) and Alphabet (GOOGL, -2.6%), for instance, were both downgraded by Citi analysts who felt investors' expectations for ad growth at the firms were too optimistic. But the likes of Apple (AAPL, -2.6%), Nvidia (NVDA, -3.7%), Tesla (TSLA, -6.4%) and more were swept up in a selloff in growth names that sent the Nasdaq 2.6% lower to 13,401 – its worst drop since March 18.
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.
Cyclical and value plays continued to exhibit relative strength, however.
The Dow, which briefly had its head above the 35,000 level, managed to escape with a mere 0.1% loss to 34,742; 3M (MMM, +2.1%) and Procter & Gamble (PG, +1.9%) prevented the industrial average from suffering deeper declines.
Other action in the stock market today:
- The S&P 500 declined 1.0% to 4,188.
- The small-cap Russell 2000 was dinged up with a 2.6% decline to 2,212.
- Marriott International (MAR, -4.1%) was another notable decliner today after the hotel operator reported earnings. For its first quarter, MAR banked a better-than-anticipated adjusted per-share profit of 10 cents, but revenues of $2.32 billion for the three-month period fell short of expectations.
- Chipotle Mexican Grill (CMG, -2.4%) finished in the red today, too. The burrito chain unveiled several employee compensation incentives as it looks to hire 20,000 domestic workers. Included in the company's initiatives are wage hikes for both hourly and salaried employees, as well as new opportunities to help workers climb the corporate ladder.
- Following a ransomware attack on Colonial Pipeline, which forced that company to temporarily shut down its system that transports fuel along the East Coast, U.S. crude oil futures rose 2 cents to end at $64.92 per barrel.
- Gold futures gained 0.3% to finish at $1,837.60 an ounce, marking their fourth straight win.
- The CBOE Volatility Index (VIX) jumped 16.9% to 19.51.
- Bitcoin prices dipped 3.1% to $55,850.51. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)
Don't Sleep on the Rotation
Experts continue to suggest that investors take the hint.
"The outperformance in mega-cap tech stocks has likely nearly run its course as valuations in these stocks have moved up considerably in recent weeks, thanks to better-than-expected earnings and a retreat in bond yields," says Andrea Bevis, senior vice president, UBS Private Wealth Management. "Investors should diversify beyond mega-cap tech companies and rotate into cyclical and value-oriented areas of the market that should continue to benefit from higher yields and a broadening economic recovery."
That's a continued green light for the "reflation trade" and other recovery-themed stocks that have already done well so far in 2021 ...
... at least, broadly speaking.
A few individual stocks in "preferred" sectors, such as industrials and consumer discretionaries, are throwing off far more warning signs than their peers. With markets feeling just a bit toppy across the board, we've dug around to see where the deepest pockets of risk lie – and we've come across 10 stocks that, at the moment, look a bit rough. Watch your step.
-
Kiplinger Weekly Quiz: What's Driving the Gold Price?Quiz Soaring gold prices and a new IRS CEO were in the news this week — but why? How much do you know about the week's financial stories?
-
Ask the Editor: Capital Losses and the Wash Sale RuleAsk the Editor In this week's Ask the Editor Q&A, we answer five questions from readers relating to end-of-year tax planning, capital-loss harvesting and the wash sale rule.
-
Dow Dives 878 Points on Trump's China Warning: Stock Market TodayThe main indexes erased early gains after President Trump said China is becoming "hostile" and threatened to cancel a meeting with President Xi.
-
S&P 500 Hits New Highs as Rally Resumes: Stock Market TodayTech stocks were the biggest gainers on Wall Street today, with Nvidia and Dell making notable moves.
-
Rally Fades on Mixed AI Revolution News: Stock Market TodayAll three main U.S. equity indexes opened higher but closed lower as a seven-session winning streak for the S&P 500 came to an end.
-
S&P, Nasdaq Hit New Highs: Stock Market TodayA late-day rally wasn't enough to lift the Dow into the green as its six-session winning streak came to an end.
-
Dow Adds 238 Points as UNH, CAT Pop: Stock Market TodayThe lack of a September jobs report didn't seem to worry market participants, with the data delayed due to the ongoing government shutdown.
-
Stocks at New Highs as Shutdown Drags On: Stock Market TodayThe Nasdaq Composite, S&P 500 and Dow Jones Industrial Average all notched new record closes Thursday as tech stocks gained.
-
S&P 500 Sees New Highs on Shutdown Day: Stock Market TodayMost of its components were in the red, but the S&P 500 Index still managed to hit a new intraday all-time high.
-
Stocks Close September on a High Note: Stock Market TodayA little bit of late risk-on behavior was enough to lift stocks into the green on the last day of September.
