Stocks End Lower As Growth Worries Widen
4:04 pm Thursday, September 09th, 2021
U.S. stocks fell in volatile trading as mixed economic data kept investors on edge about the timing of stimulus tapering even as the relentless spread of the Covid-19 delta variant undermines global growth.
The sector standings also show a mixed picture: five of the 11 S&P 500 sectors trade higher while six trade lower. The defensive-oriented real estate (-1.0%), health care (-0.7%), and consumer staples (-0.5%) sectors underperform, while the cyclical financials (+0.9%), energy (+0.6%), and materials (+0.5%) sectors outperform.
The general preference for cyclical stocks is being attributed to continued improvement in the weekly initial and continuing claims report, which showed initial claims decline to 310,000 (Briefing.com consensus 345,000). This was another post-pandemic low.
Interestingly, American Airlines (AAL), United Airlines (UAL), JetBlue (JBLU), and Southwest Air (LUV) downgraded their Q3 outlooks because of the Delta variant, but shares are rallying despite the updates. Presumably, the news was already priced in and investors are hoping for a rebound in travel.
In the health care space, Biogen (BIIB) was down 7.5% after observing that its Alzheimer’s treatment is seeing a slower launch than initially anticipated. Conversely, Moderna (MRNA) was up 8% after announcing significant advances across its portfolio of mRNA pipeline programs.
Looking at some earnings news, lululemon athletica (LULU) is trading at record highs after beating top and bottom-line estimates and providing upside guidance. RH (RH) has also had a positive earnings reaction, while GameStop (GME) trades lower in response.
Separately, the ECB said the pace of emergency asset purchases could be moderately reduced, yet that had little impact on the Europe Stoxx 600 (unch), which closed little changed.
