The Dow Industrials and S&P 500 ended soberly low on Friday 22nd January 2021, brought down by losses in blue-chip technology loyalists Intel and IBM following their quarterly results, and economic reopening is expected in the upcoming months.
IBM Corp fell by 9.91% and was the top drag on the Dow Jones Industrial Average. It missed estimates for quarterly revenue, wounded by an unusual sales slump in their software unit.
Intel Corp declined by 9.29% as Pat Gelsinger, new Chief Executive Officer through his post-earnings comment implied that there was a void of the strong embrace of outsourcing.
On the other hand, losses in the tech sector were balanced by profits from Microsoft Corp and Apple Inc which kept the declines on the main U.S. stock indexes in check and lifting the Nasdaq moderately.
Among the 11 S&P sectors, the worst performers were energy and financials on 22nd January 2021. In comparison, the defensive utilities and real estate groups were ahead.
Andrew Mies, chief investment officer at 6 Meridien in Wichita Kansas, said, “Any delay or setback in the reopening theme is probably going to be a headwind for the energy sector. (But) the market is telling you that its confidence in the cyclical is diminished now.
The S&P 500 and the Nasdaq cut some losses soon after the opening bell as data suggested U.S. manufacturing activity shockingly increased to its highest level in more than 13-1/2-years at the beginning of January, juxtaposed to a discouraging result in the purchasing manager data in Europe earlier.
The Dow Jones Industrial Average declined by 179.03 points, or 0.57%, to 30,996.98, the S&P 500 fell by 11.6 points, or 0.30%, to 3,841.47 and the Nasdaq Composite gained 12,15 points, or 0.09%, to 13,543.06.
Volume on the U.S. exchanges was 12.79 shares, in comparison to the 12.68 billion average for the entire season over the past 20 trading days.
Despite the deficiency, the three major indexes scored weekly gains, with the tech-oriented Nasdaq tracking for its best weekly performance since 6th November 2021 as investors rushed into Alphabet Inc, Apple Inc and Amazon.con Inc, forecasting their earnings reports in the coming weeks.
For the week 18-22 January, S&P increased by 1.94%, the Dow rose by 0.59% and the Nasdaq unofficially rose by 4.19%.
Stock evaluations are coming close to levels that haven’t been witnessed since the Dotcom era. In light of this, some market members said new COVID-19 mutations, variants and hiccups in vaccine rollouts present near-term risks.
U.S. President Joe Biden said the economic crisis in the country was worsening and that the government needs to take immediate and major action to help Americans fighting to survive.
Mies regarding the control of COVID-19 and the reopening of the economy, commented, “The absolute assurance that investors felt a week ago… some of that is starting to fade out of the market.”
The Senate Finance Committee unanimously approved Janet Yellen’s nomination as the first woman Treasury secretary, implying that she will win the entire Senate’s approval.
Declining issues exceed advancing ones on the NYSE by a 1.00-to-1 ratio. On Nasdaq by a 1.53-to-1 ratio in favour of advancers.
The S&P 500 posted 16 fresh 52-week highs and no new lows. Meanwhile Nasdaq Composite reported 189 new highs and 7 new lows.
