Stocks Recover On value Buying, Nasdaq Underperformed
4:04 pm Wednesday, September 29th, 2021
U.S. stocks rose Wednesday, recovering some of their losses from the prior day’s rout as traders scooped up discounted shares.
The early rebound bias had some mechanical characteristics, as stocks reacted positively to a retracement in Treasury yields. The 10-yr yield was trading at 1.50% earlier today after hitting 1.56% yesterday, but now it’s stubbornly trading at 1.52%. That’s one basis point below yesterday’s settlement.
Nine of the 11 S&P 500 sectors are still trading in positive territory, but only the utilities sector (+1.7%) is up more than 1.0%. Notably, the information technology sector (-0.03%) has turned negative, which has had an influential drag on the market. The materials sector (-0.2%) is the other sector trading lower.
The tech sector is being pressured by its semiconductor components after Micron (MU 71.65, -1.45, -2.0%) issued downside Q1 guidance, which has overshadowed its EPS beat. The Philadelphia Semiconductor Index is down 1.5%.
Generac (GNRC 398.70, -26.64, -6.3%) issued downside FY21 revenue guidance while Sherwin-Williams (SHW 284.05, +4.43, +1.6%) lowered its Q3 and FY21 guidance due to worsening raw material availability and pricing inflation. SHW shares are trading higher, though.
In some upbeat news, Netflix (NFLX) acquired video game developer Night School Studio for an undisclosed sum, Boeing (BA) was upgraded to Outperform from Market Perform at Bernstein, and Dollar Tree (DLTR) will increase its share buyback program to $2.5 billion.
Not so good for Dollar Tree shoppers, though, is that the company plans to start selling products between $1.25-1.50 in some stores.
Separately, Fed Chair Powell spoke at the ECB Forum on Central Banking earlier today. He didn’t say anything particularly new, reiterating that inflation pressures should moderate as supply bottlenecks ease and that the Fed is getting closer to start tapering asset purchases.
