The stock market today: Dow and oil fall as Covid fears seize Europe as technology rises
Text size
The current chairman of the board, Jerome Powell, is considered likely to be nominated as chairman of the Federal Reserve.
Justin Sullivan / Getty Images
Technology stocks jumped Friday, while
Dow Jones Industrial Average
fell and bond yields coincided with a new increase in Covid-19 cases.
In the midday trade, the Dow fell 174 points, or 0.5%, after the index fell 60 points on Thursday to close at 35,870.
S&P 500
rose 0.2% after the index closed at a record high on Thursday. The technology-heavy
Nasdaq Composite
rose 0.7 percent.
The 10-year government interest rate fell to 1.53% from a Thursday close of 1.61%. It is a steep fall for one day, bringing it further below the peak level in the second half of 2021 of 1.7%, reached at the end of October.
It bodes well for the technology industry. Lower bond yields make future profits more valuable – and fast-growing companies in the sector expect a large part of their profits to come many years ahead.
Accordingly, the S&P 500 surpasses the Dow due to its concentration in technology. Outside of technology, stocks had a tough day; almost 60% of the S&P 500 shares were in the red, according to FactSet.
Finally, market participants rush to safety on Friday. The fall in returns means that investors buy up the bond and send the price higher. This comes as new Covid-19 cases increase in Europe, prompting Austria to announce closures from next week.
Economic data from Germany also did not help investors’ risk appetite. The countries’ producer price index rose 3.8% month-on-month, higher than expected 1.9% and above the previous result of 2.3%. Such strong inflation could force the European Central Bank to raise interest rates, which could stifle economic growth and ultimately lower inflation. ECB President Christine Lagarde said on Monday morning that the central bank is currently unlikely to raise interest rates in 2022. Nevertheless, economic data will help guide monetary policy.
The price of oil also fell. WTI crude fell 4.2% to $ 75.70 a barrel. It is down 9% from the 2021 high of more than $ 84 per barrel on November 9.
Oil stocks also fell. The
Energy Select Sector SPDR
The fund (XLE) fell more than 3%. It is down just over 7% since the end of October, when it peaked in 2021.
Abroad, Hong Kongs
Hang Seng
The index fell 1.1%, and performed worse than other stock exchanges in Asia when it was weighed down by a sharp fall in
Alibaba (ticker: BABA and 9988.HK) stock after the Chinese e-commerce giant’s quarterly result on Thursday which showed declining growth. The pan-European
Stoxx 600
fell 0.3 percent.
Here are five stocks on the move Friday:
Intuit (INTU) shares rose 9.5% after the company reported a profit of $ 1.53 per share, beating estimates of 97 cents per share, at sales of $ 2 billion, above expectations of $ 1.8 billion.
Williams-Sonoma (WSM) shares rose 0.6% after the company reported a profit of $ 3.32 per share, beating estimates of $ 2.56 per share, at sales of $ 2.1 billion, above expectations of 1.8 billion dollars.
Foot Locker (FL) shares fell 12% even after the company reported a profit of $ 1.93 per share, beating estimates of $ 1.37 per share, at sales of $ 2.19 billion, above expectations of $ 2.15 billion dollars.
Nvidia (NVDA), which has struggled this week – up around 7% over the past five days – rose again and climbed 4%.
Workday (WDAY) was on its way down, down 3.1% despite earnings being better than expected late on Thursday.
Write to Jacob Sonenshine at jacob.sonenshine@barrons.com
