Stocks Fall As Tech Sees Sudden Profit Booking
5:03 pm Thursday, January 13th, 2022
The Nasdaq and S&P 500 were falling on Thursday as investors took profits from technology stocks ahead of the fourth quarter earnings season and after a three-session rally.
Growth stocks started the day leading the market higher, so to see them turn around sharply has not been good for investor sentiment, especially when the 10-yr yield is down one basis point to 1.72%. The Russell 3000 Growth Index is down 1.4% after being up 0.5% in early action.
The information technology (-1.7%), health care (-1.1%), consumer discretionary (-1.3%), and communication services (-0.8%) sectors — which contain the mega-caps and biotechnology stocks — are down noticeably.
Semiconductor stocks are also weak despite Taiwan Semi (TSM) beating EPS estimates and guiding Q1 revenue above consensus. The Philadelphia Semiconductor Index is down 1.0%.
Conversely, the industrials (+0.6%) and utilities (+0.6%) sectors outperform with modest gains. Airline stocks are rallying around upbeat earnings news from Delta Air Lines (DAL) while KB Home (KBH 48.47, +6.11, +14.4%) is lending support to the homebuilders following its earnings report.
The financials sector (+0.1%) is holding its ground in front of Q4 earnings from the big banks tomorrow morning, including JPMorgan Chase (JPM) and Citigroup (C).
Today’s economic data hasn’t influenced the market that much. The December Producer Price Index (PPI) for final demand increased just 0.2% m/m (consensus 0.4%) amid a sharp drop in oil prices, but prices have since reclaimed those losses. Weekly initial claims unexpectedly increased to 230,000 (consensus 202,000).
