The technology sector's semiconductor industry took the reins on Monday and steered both the Nasdaq Composite and S&P 500 Index to fresh all-time highs to kick off the week.
Tech's gains (+1.1%) seemed to come at the expense of overheated cyclical plays, such as energy (-3.4%) and financials (-0.7%), and amid a decline in Treasury rates, with the 10-year yield off 6 basis points to 1.47% (a basis point is one one-hundredth of a percentage point).
"The move in rates is partially in response to some concerns related to the spread of the delta (COVID) variant, which has caused some countries to re-implement restrictions," says Michael Reinking, senior market strategist at the New York Stock Exchange. "This is also hitting oil prices, which briefly traded to a new high earlier before reversing lower." U.S. crude oil futures finished the day off 1.5% to $72.91 per barrel.
Sign up for Kiplinger’s Free E-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.
Helping lead tech's rally was Nvidia (NVDA (opens in new tab), +5.0%), which jumped after fellow semiconductor firm Broadcom (AVGO (opens in new tab), +2.3%) backed Nvidia's $40 billion buyout of chip designer Arm. Related names such as Intel (INTC (opens in new tab), +2.8%) and Applied Materials (AMAT (opens in new tab), +3.5%) followed suit.
The Nasdaq advanced by 1.0% to a record close of 14,500. The S&P 500's 0.2% gain wasn't as robust, but was enough for a new high of 4,290. The Dow Jones Industrial Average retreated, however, declining 0.4% to 34,283.
Other action in the stock market today:
- The small-cap Russell 2000 slipped 0.5% to 2,322.
- Intellia Therapeutics (NTLA (opens in new tab)) surged 50.2% after the biotech over the weekend reported positive Phase I data for its gene-editing treatment for transthyretin amyloidosis, a genetic liver disorder in which the body builds up abnormal amounts of protein. The treatment, which is being developed with Regeneron Pharmaceuticals (REGN (opens in new tab), -1.4%), is the "first-ever clinical data supporting safety and efficacy of in vivo CRISPR genome editing in humans," according to an NTLA press release.
- Facebook (FB (opens in new tab)) jumped 4.2% after a federal judge in the District of Columbia dismissed an antitrust lawsuit brought forth by the Federal Trade Commission (FTC). "The FTC has failed to plead enough facts to plausibly establish a necessary element of all of its Section 2 claims – namely, that Facebook has monopoly power in the market for Personal Social Networking (PSN) Services," read the filing. Today's pop was enough for FB to close above the $1 trillion market-cap level for the first time ever.
- Gold futures edged up 0.2% to settle at $1,780.70 an ounce.
- The CBOE Volatility Index (VIX) rose 0.9% to settle at 15.76.
- Bitcoin prices jumped 6.9% to $34,455.73. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)
Maybe You Don't Need to Choose Between Growth and Value
Should investors bank in a continued resurgence of tech and other growthy names for the rest of 2021, or does value still have gas in the tank?
As we discussed today in our free A Step Ahead e-letter, Capital Group, the name behind American Funds, says you don't necessarily need to choose.
"There can be growing companies that are cheap and cheap companies that grow, so value and growth are not in opposition," says Capital Group equity portfolio manager Martin Romo. "We are in a target-rich environment with opportunities to invest in companies that are rapidly growing as well as classic cyclicals."
The "growing companies that are cheap and cheap companies that grow" he speaks of are better known by just four letters: GARP. That stands for "growth at a reasonable price," and even with the major indexes at or near all-time highs, several companies offer just that: the prospects for breakneck growth, but also valuations that represent discounts to their own historical multiples and/or the stock market's current valuation.
If you want your own portfolio to pack this one-two punch, check out these 11 GARP picks.
Kyle Woodley was long NVDA as of this writing.
-
-
Controversial Capital Gains Tax Upheld in Washington
The state’s historic long term capital gains tax is projected to bring in $1 billion over the next two years.
-
Protect Your Retirement: Seven Things You Can Do Right Now
Whether you’re preparing to retire or already retired, a proactive plan is critical to help safeguard your retirement, especially amid uncertainty.
-
Stock Market Today: Stocks Finish Mostly Higher After First Citizens Buys SVB Assets
The Nasdaq closed lower, though, as mega-cap tech stocks declined.
-
Stock Market Today: Stocks Brush Off Deutsche Bank Troubles
Troubling financial sector headlines kept stocks lower for most of the day, but the major indexes pushed higher by the close.
-
Stock Market Today: Stocks Close Higher in Volatile Session
The major indexes spent most of Thursday in rally mode, but selling pressure emerged in afternoon trading.
-
If You'd Put $1,000 Into Amazon Stock 20 Years Ago, Here's What You'd Have Today
Amazon AMZN stock has lost almost $900 billion in value since its all-time high, but bulls say it's only a matter of time before it reclaims its heights.
-
Stock Market Today: Stocks Sink After Latest Fed Rate Hike
The major indexes sold off sharply Wednesday even amid signs the Fed's rate-hike campaign could be nearing an end.
-
Stock Market Today: Markets Up Again as Bank, Energy Stocks Outperform
The major indexes closed higher for a second straight day ahead of tomorrow's highly anticipated Fed decision.
-
Stock Market Today: Stocks Rise Ahead of Fed
Bank headlines dominated another choppy day of trading on Wall Street.
-
Stock Market Today: Stocks Fall After First Republic Bank Suspends Dividend
The embattled lender's dividend cut was just the latest sign of instability in the banking industry.
