Stocks Fall in Volatile Trade, Tech Underperforms
5:02 pm Friday, March 11th, 2022
The tech-heavy Nasdaq and the S&P 500 indexes fell on Friday at the end of a volatile week on escalating tensions in Ukraine and worries over higher inflation, with focus turning to one of the most-anticipated Federal Reserve’s policy meetings next week.
Part of the frustration stems from the fact that the major indices faded positive starts, which saw gains between 0.7% (S&P 500) and 1.0% (Dow). The early gains were catalyzed by reports describing a positive shift in talks with Ukraine, per President Putin, but not many people are believing that Mr. Putin has peaceful-minded intentions.
Other frustrating aspects include higher oil prices after the U.S and Iran suspended talks for a nuclear agreement, a flattened Treasury yield curve that is signaling growth concerns, and another round of disappointing guidance/reactions from growth stocks — from DocuSign (DOCU) and Rivian (RIVN).
It’s no surprise, then, to see a lack of dip-buying efforts, but given the volatility this year, it wouldn’t be surprising to see something good happen this afternoon either. Presently, nine of the 11 S&P 500 sectors are trading lower with losses ranging from 0.1% (materials) to 1.1% (information technology).
The financials (+0.2%) and health care (+0.1%) sectors, like the Dow, are barely trading higher.
The mega-caps are exerting key pressure for the second straight day, evidenced by the 1.2% decline in the Vanguard Mega Cap Growth ETF, versus a 0.3% decline for the Invesco S&P 500 Equal Weight ETF (RSP 150.63, -0.49).
Oracle (ORCL) is an exception after the company guided fiscal Q4 EPS and revenue above consensus, giving investors a good reason to overlook a rare EPS miss. ORCL shares are up 2.6%, paying little attention to an analyst downgrade to Underweight from Neutral at Piper Sandler.
In the Treasury market, the 2-yr yield is up three basis points to 1.75% amid persistent rate-hike expectations due to the inflationary environment, while the 10-yr yield is down three basis points to 1.98% amid concerns surrounding equities and the economy.
