S&P 500 Cuts Losses to End Flat as Tech Finds Dip-Buyers Late Into Close -Breaking
By Yasin Ebrahim
Investing.com — The S&P 500 cut some losses late into close Monday to end roughly flat as investors appeared to buy the intraday dip in tech even as Treasury yields rose on growing expectations that the Federal Reserve may be forced to aggressively tighten monetary policy.
It fell 0.4%. Or 201 points.
Growth sectors of the market including tech ended the day well off the session lows despite a fresh surge in after Powell said the Fed may have to move faster on rate hikes if inflation doesn’t abate.
Powell said on Monday that as expectations of seeing inflation peaking in the first quarter “has already fallen apart,” a further ramp-up in inflation could force the central bank “to move more quickly.”
Meta Platforms (NASDAQ) was the leader in sector decline. They were followed by Alphabet (NASDAQ), Microsoft Corporation (NASDAQ), and Amazon (NASDAQ). The session ended in the green.
Apple (NASDAQ: ) was almost 1% more closed as Foxconn – one of Apple’s biggest suppliers – said its Shenzhen plant had nearly been fully functional following suspension last Wednesday due to an increase Covid-19 cases.
Although the value-sector sectors such as financials and energy will be benefited by the higher rates environment, Wall Street still favors tech.
“In this climate […]”I prefer information technology, financial services and communication services,” Wells Fargo stated in a memo.
Some losses on the wider market were also compensated by energy stocks. This was due to rising oil prices and fears of disruptions in supply, as well as reports that the European Union may ban Russia’s oil.
While the Ukraine conflict has been going on for four weeks, there is little to no sign that it will end soon. There are still hopes of a diplomatic settlement. On Monday, President Joe Biden called Russia’s president Vladimir Putin war criminal for the attacks on Ukraine. Biden said that Russia had plans to launch cyber attacks on the U.S.
Marathon Oil (NYSE:), Diamondback Energy(NASDAQ:), and Occidental Petroleum [NYSE:] led energy higher with the latter rising more than 8%.
The weakness of casino stocks, including Caesars Entertainment (NASDAQ 🙂 and Penn National Gaming(NASDAQ 🙂 caused consumer discretionary to fall, despite the favorable environment for sports betting as the NCAA’s March Madness lasted.
Tesla (NASDAQ:), however, bucked the trend lower in the sector, rising more than 1% ahead of the opening of the electric vehicle maker’s Gigafactory in Berlin on Tuesday.
Tesla competitor Nio (NYSE 🙂 dropped more than 2 percent after Deutsche Bank cut its price target for the company to $50, from $70. However, Deutsche bank expressed optimism about the prospects of Chinese EV manufacturer China. They expect to see a rise in deliveries from the 10,000 per month they received this year to 25,000.
Boeing (NYSE :), a key Dow component fell more than 3% following a fatal accident in southern China’s mountains that resulted in its 737-800 fleet being grounded by China Eastern Airlines (NYSE :).
Alleghany (NYSE) increased more than 24% following the announcement by Berkshire Hathaway, (NYSE:), that it would be buying the insurance company for $11.6 million.