Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

S&P 500 Ends Week in Red Despite Signs Tech, Value Can Co-Exist

Stock MarketsMay 14, 2021 21:27
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters

By Yasin Ebrahim

Investing.com – The S&P 500 ended the week in the red Friday despite a rebound in tech and a rally in economically-sensitive value stocks amid optimism the consumer remains in good shape to support the recovery.

The S&P 500 rose 1.49%, the Dow Jones Industrial Average added 1.06% to 360 points, and Nasdaq Composite gained 2.3%. The weekly loss for the broader market followed a wobble early this week, when fears of runaway inflation prompted investors to hit pause on the stocks.

Retail sales were flat in April, after an upwardly revised 10.7% jump in the prior month as spending fueled by stimulus checks dried up. But with consumers hoarding record amounts of cash, further progress on the reopening of the economy will see spending return in the spring and summer.

"Stimulus checks were mostly used up in March spending, but households now hold larger savings than they did pre-pandemic," Yelena Maleyev, an economist at Grant Thornton said in a note.

"New CDC guidance saying that vaccinated people no longer need to wear masks, added to more states reopening in May, will lead to more consumer activity during the spring and summer months," Maleyev added.

Consumer spending, which makes up two-thirds of the economy, has been earmarked by some as the key to sustain the broader market rally, particularly in cyclicals corners of the market, as the support from monetary and fiscal stimulus will eventually be reined in.

"Going forward, as federal stimulus runs dry, consumer spending will be reliant on more organic means such as job and income growth," Stifel said.

Cyclicals including financials, consumer discretionary and energy were in the green, with energy leading the pack, up more about 3% amid rising oil prices.

Marathon Oil (NYSE:MRO), Occidental Petroleum (NYSE:OXY) and HollyFrontier (NYSE:HFC) were among the biggest gainers, up more than 6% on the day.

The reopening trade was also in vogue, supported by airlines and cruise lines up strongly.  

Tech stocks, meanwhile, continued to make gains as their recent rout appears to have made their valuations, which are sensitive to a faster pace of inflation, more palatable.

Facebook (NASDAQ:FB) was up 3%, Google-parent Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT) and Amazon.com (NASDAQ:AMZN) gained more than 2%, while Apple (NASDAQ:AAPL) ended up about 2% higher.

Tesla (NASDAQ:TSLA), the sixth biggest weighting on the S&P 500, was up 3%.

On the earnings front, meanwhile, high-flying tech names including Airbnb and DoorDash that had been battered recently returned to investors' shopping lists.

DoorDash (NYSE:DASH) raised its outlook on order value for the rest of the year after reporting earnings that missed, but revenue that topped analysts' estimates. Its share price rose more than 22%.

Airbnb (NASDAQ:ABNB) reported better-than-expected quarterly revenue, and said bookings were gaining momentum as the global travel restrictions ease, sending its shares 4% higher.

Walt Disney (NYSE:DIS) slipped 2.6% after its subscriber numbers and revenue during the first quarter fell short of analysts' estimates, casting some doubt among investors whether there is too much optimism baked into the expected growth of its streaming service, Disney+.

"We expect the DTC [Direct to Consumer] narrative to take a breather for a brief period … [but] moving beyond this hiccup … we continue to see the path to growing total DTC subs from 159mm today to 300-350mm by FYE-24 as structurally sound," RBC said.

S&P 500 Ends Week in Red Despite Signs Tech, Value Can Co-Exist
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email