Stocks Extend Gain, Financials Outperform
4:20 pm Wednesday, August 25th, 2021
U.S. stock indexes clawed their way to intraday record highs Wednesday as investors assess the prospects of a massive spending project and look ahead to the Federal Reserve’s Jackson Hole Symposium.
The financials sector (+1.5%) was the strongest sector in the S&P 500, as the 10-yr yield trades higher by four basis points to 1.33%, while the energy (+0.8%), materials (+0.6%), and industrials (+0.8%) sectors follow suit with decent gains.
Conversely, the defensive-oriented information technology (-0.3%), health care (-0.2%), real estate (-0.2%), and consumer staples (+0.02%) sectors underperform as investors presumably increase their risk tolerance.
Generally, risk sentiment is being supported by easing concerns about the Delta variant, rehashed commentary about there being no alternative to stocks, a belief that dips will continue to be bought so long as the Fed remains supportive, and encouraging earnings news.
Earnings reactions have been mixed, though. Dicks Sporting Goods (DKS) stands out with a 13% gain, as the company also raised its FY21 guidance, increased its quarterly dividend by 21%, and announced a $5.50 per share special dividend.
The semiconductor space has been an exception to the underperforming growth-stock trade after DigiTimes reported that Taiwan Semi (TSM) plans to increase prices on some more advanced products by 10%. The Philadelphia Semiconductor Index is up 1.1%.
Separately, Johnson & Johnson (JNJ) announced interim data that supported the case for a booster shot for its COVID-19 vaccine after eight months. On a related note, Pfizer (PFE) intends to seek FDA approval for its booster shot for people 16 and older.
