Yahoo Finance Stock Market News for May 12, 2021
Benchmarks closed lower on Tuesday as concerns about rising inflation and high valuation caused sell-off in technology and sectors related to the great reopening.
The Dow Jones Industrial Average (DJI) fell 473.66 points, or 1.4%, to close at 34,269.16 and the S&P 500 fell 36.33 points, or 0.9%, to close at 4,152.10. The Nasdaq Composite Index closed at 13,389.43, shedding 12.43 points, or 0.1%. The fear-gauge CBOE Volatility Index (VIX) increased 11.1%, to close at 21.84. Declining issues outnumbered advancing ones for 2.85-to-1 ratio on the NYSE, while a 1.62-to-1 ratio on the Nasdaq favored decliners.
How Did the Benchmarks Perform?
The Dow witnessed its worst day since Feb 26, yesterday just after achieving the 35,000 milestone in the previous sessions high. More than 3% decline in heavy-weights like The Travelers Companies, Inc. TRV and The Home Depot, Inc. HD dragged the blue-chip index lower. Both the stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
On Tuesday’s volatile session, though several tech behemoths managed to close in the green, the sell-off in the technology sector spilled over to others like energy, finance and industrials. Of the 11 major sectors of the S&P 500, only the materials sector closed in the green. The energy sector witnessed the highest decline, closing 2.6% lower for the day. Shares of Chevron Corporation CVX and Exxon Mobil Corporation XOM closed 2.6% and 3.2% lower, respectively.
The sell-off in tech and growth stocks overshadowed more than a 4% rise in Nasdaq’s top players like Splunk Inc. SPLK, Peloton Interactive, Inc. PTON and Atlassian Corporation Plc TEAM. The tech-laden index’s growth stocks with high valuations and expectations, Tesla, Inc. TSLA also closed 1.9% lower on Tuesday.
Overall, the S&P 500 posted seven new 52-week highs and one new low, while the Nasdaq Composite recorded 28 new highs and 224 new lows. A total of 11.78 billion shares were traded on Tuesday, higher than the last 20-session average of 10.33 billion.
Big Techs Tumble Over Rising Inflation Jitters
On Tuesday, big techs like Microsoft Corporation MSFT, Apple Inc. AAPL and Alphabet Inc. GOOGL tumbled from the beginning of the session as investors’ sentiments were clouded with concerns about rising inflation and high valuations. Investors sold off most of these higher-priced tech stocks which eventually overflowed into finance, energy and industrial sectors. The VIX that measures fear in the markets derived by option prices on the S&P 500 also jumped above the 20-point mark for the first time in two months.
Rising commodity prices and labor shortages have instilled fear among investors, despite the Federal Reserve’s reassurances of no near-term hike in interest rates. Additionally, the Labor Department also reported that the country topped 8 million job openings in March for the first time ever. Last week’s disappointing employment report and yesterday’s report suggest that there is a shortage of labor and employers are struggling to find qualified workers. Shortage in labor and supply of raw materials along with booming demand will lead to an increase in prices, which has spooked investors as it could translate into long-term inflation.
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Microsoft Corporation (MSFT) : Free Stock Analysis Report
Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
The Travelers Companies, Inc. (TRV) : Free Stock Analysis Report
The Home Depot, Inc. (HD) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
Chevron Corporation (CVX) : Free Stock Analysis Report
Tesla, Inc. (TSLA) : Free Stock Analysis Report
Splunk Inc. (SPLK) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
Atlassian Corporation PLC (TEAM) : Free Stock Analysis Report
Peloton Interactive, Inc. (PTON) : Free Stock Analysis Report
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