⏳ Final hours! Save up to 55% OFF InvestingProCLAIM SALE

S&P 500 Flirts With Record, But 'Overbought' Jitters Keep Lid on Gains

Published 06/04/2021, 18:24
Updated 06/04/2021, 18:53
© Reuters
US500
-
DJI
-
MSFT
-
GOOGL
-
AAPL
-
AMZN
-
STT
-
PNC
-
APA
-
DVN
-
BK
-
TSLA
-
IXIC
-
FANG
-
GOOG
-

By Yasin Ebrahim

Investing.com – The S&P 500 continued to trade near record highs Tuesday, led by energy and consumer stocks, but some on Wall Street are calling for caution as the latest acceleration pushed stocks into "overbought" territory.    

The S&P 500 rose 0.1% after hitting a record high of 4,086.10, the Dow Jones Industrial Average fell 0.14%, or 46 points, the Nasdaq Composite was up 0.1%.

"Watch the S&P 500 over the next few days for potential consolidation - that benchmark is now very overbought / extended on the short-term trading charts and is likely to see some profit taking ahead in our opinion," Janney Montgomery Scott said in a note. Initial support is touted in the 3975-to-4000 zone, the firm added.

The gloomy update comes just as energy stocks, which had been battered a day earlier, found their footing as optimism over global growth remains steady. Europe, which remains in lockdowns, is expected to mount a stronger recovery.

The International Monetary Fund lifted its global growth forecast to 6% in 2021, up from its prior forecast of 5.5%, citing the ongoing progress of the vaccine deployment worldwide. The IMF forecast the euro zone to grow 4.4% in 2021.

Devon Energy (NYSE:DVN), APA (NASDAQ:APA) and Diamondback Energy (NASDAQ:FANG) were among the leaders in the energy sector, with the the latter up more than 3%. 

Financials, however, failed to participate in the broader rally cyclicals, as the run up in regional banks paused.

State Street (NYSE:STT), Bank of New York Mellon (NYSE:BK), PNC Financial Services Group Inc (NYSE:PNC) were among the laggards with just days to go until the major Wall Street banks kick off the first quarter earnings season in earnest.

"Although we expect near-term volatility as 1Q earnings start on April 14, reflecting weak loan growth, margin pressure, lower mortgage banking revenues and seasonal factors, we remain positive on the bank group," Wedbush said.

Technology stocks, were roughly unchanged, with the fab 5 trading mixed, even as falling U.S. bond yields supported investor sentiment on longer-duration growth stocks.  

The U.S. 10-year slipped below 1.7% quote yields after trading in range of 1.67% to 1.72% in recent days. 

Microsoft (NASDAQ:MSFT), Google-parent Alphabet (NASDAQ:GOOGL), Facebook (NASDAQ:FB), and Amazon.com (NASDAQ:AMZN) traded lower, while Apple (NASDAQ:AAPL) was higher.

In other news, Tesla (NASDAQ:TSLA) struggled to get going after racking up a 6% gain on Monday, as investors digested a bearish note from Roth Capital.

Roth Capital said Tesla is only worth $150 a share and suggested the electric automaker was a "minor player" in the U.S. and European markets.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.