The Nasdaq index opened lower Tuesday as investors continued to move out of megacap growth stocks and into companies expected to benefit from the reopening of economies.
US and European stock markets also experienced a sudden drop of 0.5% in large volumes around 1 p.m. Read more
Abundant stimulus measures, rapid vaccination drives and the Federal Reserve’s accommodating political stance have spurred a strong rebound in the U.S. economy and pushed Wall Street to record highs this year. However, the so-called “pandemic winners” have recently begun to fall in favor.
“While megacap technology companies have been central to the solid performance of portfolios throughout the pandemic, we believe investors should be careful to avoid an allocation to this part of the market,” wrote Mark Haefele, Chief Investment Officer at UBS Global Wealth Management . in a client note.
“In an environment of accelerating growth, we continue to prefer cyclical and value sectors such as economics and energy.”
Planemaker Boeing Co. (BA.N) rose 0.2%, while Chevron Corp (CVX.N) oil rose 0.7%.
8:38 ET, the Dow e-minis fell 136 points or 0.4%, the S&P 500 e-minis fell 22.25 points or 0.53%, and the Nasdaq 100 e-minis fell 113 points or 0.82%.
Among other stocks, Pfizer Inc (PFE.N) rose 1% as it raised its annual sales forecast for the COVID-19 vaccine, which it developed in conjunction with Germany’s BioNTech SE. Read more
CVS Health Corp (CVS.N) rose 1.7% by reporting first-quarter profit over analysts’ estimates and raising its forecast for 2021. Read more
Dupont (DD.N) rose 0.5% higher after the industrial materials producer raised its full-year revenue and revenue forecasts and beat expectations for the first quarter. Read more
Earnings in the first quarter have been broadly optimistic. The average profit of S&P 500 companies is expected to have increased 46% in the quarter compared to forecasts for a growth of 24% in early April, according to IBES data from Refinitiv.
Investors also awaited data throughout the week, including the Labor Department’s data on non-farm wages, which is expected to be released on Friday. The report is expected to show an increase in the number of job grants in April.
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