Stocks Bounced Back Strongly, NVDA Leads
4:08 pm Friday, August 20th, 2021
Stocks were broadly higher on Wall Street in afternoon trading Friday, though the gains were not enough to erase the market’s losses from earlier in the week.
There really isn’t a specific news catalyst today, suggesting that investors are defaulting to the buy-the-dip strategy amid some fear of missing out on a rebound rally. Every sector in the S&P 500 is trading higher, advancing issues outpace declining issues by a 3:1 margin at the NYSE and Nasdaq, and value/growth stocks are rising together.
The biggest influence, though, is coming from the top-weighted information technology sector (+1.2%), which stands atop the sector standings with a 1.2% gain. The consumer staples sector (+0.4%) underperforms on a relative basis.
The technology sector is deriving its outperformance from its three largest components — Apple (AAPL), Microsoft (MSFT), and NVIDIA (NVDA). Microsoft and NVIDIA were up amid some positive-minded analyst recommendations.
Briefly, Mizuho raised its price target on MSFT to $350 from $325 following yesterday’s news that the company will raise Office 365 business subscription prices in 2022. The Benchmark Company assumed coverage on NVDA with a Buy rating and a $230 price target following its earnings report on Wednesday.
In earnings news, Applied Materials (AMAT), Deere (DE), and Ross Stores (ROST) reported better-than-expected earnings results, but shares of each company are down more than 2.0%. Foot Locker (FL), though, is up 8% following its report.
The Treasury market is behaving well, which might be giving investors some confidence in buying the dip in equities. The 10-yr yield is currently up one basis point to 1.25% after trading at 1.23% overnight. The CBOE Volatility Index (18.57, -3.10, -14.3%) has dropped below the 19.00 level.
