Nasdaq ends lower for second day as Big Tech loses ground
Reuters
Published Nov 23, 2021 07:00AM ET
Updated Nov 23, 2021 07:20PM ET
By Ambar Warrick and Noel Randewich
(Reuters) - The Nasdaq ended lower for a second straight session on Tuesday, while the S&P 500 rose, as rising Treasury yields prompted investors to sell Tesla (NASDAQ:TSLA) and other Big Tech names and buy stocks with lower valuations.
The S&P 500 growth index dipped 0.3% and the value index climbed 0.8%.
Treasury yields extended gains as investors ramped up expectations of interest rate hikes next year after Jerome Powell was nominated by President Joe Biden as fed chair for a second term.
Tesla fell over 4% and Microsoft (NASDAQ:MSFT) lost 0.6%, with the two companies dragging on the Nasdaq more than any other stocks. Rising interest rates tend to make growth stocks less attractive to investors.
“The market is being whipsawed by a holiday shortened week, and it’s taking its cue from the recent uptick in interest rates, giving investors additional reasons to take profits in an overvalued market,” said Sam Stovall, chief investment strategist of CFRA Research in New York.
With banks benefiting from higher interest rates, the S&P 500 banks index jumped 2%, with Goldman Sachs (NYSE:GS), JPMorgan (NYSE:JPM) and Bank of America (NYSE:BAC) all rallying.
The S&P 500 energy index soared 3% and was the best-performing sector. Oil prices rose to a one-week high after a move by the United States and other consumer nations to release tens of millions of barrels of oil from reserves to try to cool the market fell short of some expectations.
An IHS Markit survey showed U.S. business activity slowed moderately in November amid labor shortages and raw material delays, but remained comfortably in expansion territory on strength in the manufacturing sector.
The Dow Jones Industrial Average rose 0.55% to end at 35,813.8 points, while the S&P 500 gained 0.17% to 4,690.7.
The Nasdaq Composite dropped 0.5% to 15,775.14.
After closing on Friday at its highest level ever, the Nasdaq has now lost about 1.8%. It remains up 22% year to date.
The CBOE volatility index briefly rose to a more than one-month high earlier on Tuesday.
The U.S. stock market will be closed on Thursday for the Thanksgiving holiday, and it finishes early on Friday.
Zoom Video Communications (NASDAQ:ZM) Inc slumped almost 15% after its third-quarter revenue growth rate slowed as demand for its video-conferencing tools eased from pandemic-fueled heights last year.
Best Buy Co Inc (NYSE:BBY) slid 12% after the electronics retailer forecast fourth-quarter comparable sales below expectations due to supply chain issues.
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Chipmakers Micron Technology (NASDAQ:MU) and Western Digital Corp (NASDAQ:WDC) rose 1.85% and 6.3%, respectively, after Mizuho Bank upgraded the stocks to "buy" from "neutral".
Declining issues outnumbered advancing ones on the NYSE by a 1.27-to-1 ratio; on Nasdaq, a 1.39-to-1 ratio favored decliners.
The S&P 500 posted 17 new 52-week highs and 6 new lows; the Nasdaq Composite recorded 66 new highs and 497 new lows.
Volume on U.S. exchanges was 11.3 billion shares, compared with the 11.1 billion average for the full session over the last 20 trading days.
Written By: Reuters
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