The markets turned sharply down today as COVID once again became the headline with the uptick over the Delta variant having investors worried about another wave and how that might impact the recovery. Once again there was a rush from tech with Amazon and Apple particularly hard hit and cyclicals like utilities and real estate getting a boost, real estate reaching a new record. Q2 projections have now been raised to 72% profit growth but as today’s expert said, “It’s been hard for the market to gain from these already elevated prices.” So Q2, in addition to showing healthy profits, must also show valuations continuing to remain high. Q2 reporting next week will be coming from such stalwarts as Netflix, J&J, Verizon and Intel. Meanwhile, volume remains below average at 9.3 billion.
Fri July 16, 2021 4:38 PM
Wall
Street ends down as Delta variant drives fears
Noel Randewich, Devik Jain
DJ: 34,987.02 +53.79 NAS: 14,543.13 -101.82 S&P: 4,360.03 -14.27 7/15
DJ: 34,687.85 -299.17 NAS: 14,427.24 -115.90 S&P: 4,327.16
-32.87 7/16
July 16 (Reuters) - Wall Street ended
lower on Friday, weighed down by declines in Amazon, Apple and other
heavyweight technology stocks, while investors worried about a rise in
coronavirus cases tied to the highly contagious Delta variant. On Thursday, Los Angeles County said it would
reimpose its mask mandate this weekend. On Friday, public health officials said
U.S. coronavirus cases were up 70% over the previous week, with deaths up
26%. read
more Cruise lines
Carnival Corp (CCL.N) and Norwegian
Cruise Line (NCLH.N) both fell sharply.
"COVID is starting to affect the
market, ironically, for the first time since last summer, when the
reopening trade began," said Jake Dollarhide, chief executive officer of
Longbow Asset Management in Tulsa, Oklahoma.
Amazon (AMZN.O), Apple and Nvidia (NVDA.O) all fell and were among the stocks
that contributed most to the S&P 500 and Nasdaq's declines. The S&P 500
technology sector index (.SPLRCT)dipped for a second session after
hitting a record on Wednesday. The utilities index
<.SPLRCU> rallied, while the real estate index (.SPLRCR)rose
to a record high.
This week, investors have balanced
worries about a recent inflation spike with reassurances from Fed Chair Jerome
Powell that the surge in prices is temporary. Second-quarter earnings season
picks up next week, with reports from companies including Netflix (NFLX.O), Johnson & Johnson (JNJ.N), Verizon Communications (VZ.N), AT&T (T.N) and Intel (INTC.O).
Analysts on average expect
72% growth in earnings per share for S&P 500 companies, according to
IBES estimate data from Refinitiv. With
the S&P 500 up about 15% so far this year, investors will look for strong
company forecasts to justify sky-high valuations.
"It's
been hard for the market
to gain here from these already elevated prices," said Rick
Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey. The S&P 500 energy sector index sank, with investors worried about expectations for
more supply and a rise in coronavirus cases that raised demand
concerns. read more Data
from the Commerce Department showed retail sales rebounded 0.6% last month as
spending is shifting back to services, bolstering expectations that economic
growth accelerated in the second quarter. read more
The
Dow Jones Industrial Average fell 0.86% to end at 34,687.85 points, while the
S&P 500 lost 0.75% to 4,327.16. The
Nasdaq Composite dropped 0.8% to 14,427.24. For the week, the S&P
500 fell about 1%, the Dow lost 0.5% and the Nasdaq shed 1.9%, their fist
weekly declines in four weeks.
Moderna
Inc (MRNA.O)jumped to a record high after S&P
Dow Jones Indices said the drugmaker will join the S&P 500 index (.SPX) as of the start of trading on July 21, replacing
Alexion Pharmaceuticals (ALXN.O). read more Cintas
Corp (CTAS.O) surged after brokerages raised
price targets on the business service provider's stock following its
fourth-quarter results. Didi Global
Inc (DIDI.N) fell after China sent state
officials from at least seven departments to the ride-hailing giant for a
cybersecurity review. read more
Declining issues outnumbered advancing
ones on the NYSE by a 2.42-to-1 ratio; on Nasdaq, a 2.21-to-1 ratio favored
decliners. The S&P 500 posted 48 new
52-week highs and no new lows; the Nasdaq Composite recorded 46 new highs and
124 new lows.
Volume on U.S. exchanges was 9.3 billion shares, compared with the 10.3 billion average for the full session over the last 20 trading days.
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