Stocks were rising modestly by midday Friday and a worse-than-expected consumer sentiment reading wasn’t helping consumer stocks.
The S&P 500 rose 0.2%, while the 10-Year-Treasruy yield was flat at 0.62%. Stocks were up more considerably in premarket trading.
Tech stocks have struggled to gain momentum in the past two days and have fallen several percentage points in the past week. Friday, the NYSE FANG index was up a touch, as its heavy market cap weighting in the S&P 500 kept the big index afloat. The Nasdaq was up 0.2%.
Investors had rushed into tech stocks from June 8 through the beginning of July, looking for secular growth trend that can power through economic and virus-related headwinds. But tech has been challenged of late, with valuations high and earnings rolling in. Netflix (NFLX) - Get Netflix, Inc. (NFLX) Report shares fell 7% after a Thursday earnings report that showed that pandemic-related growth may be temporary rather than sustainable.
Most large cap cyclical stocks like oil and banking were down, while consumer discretionary took a hit, with large caps of those falling 0.8%. Consumer sentiment for the month of July came in at a reading of 73.2 versus estimates of 78.6 and down from June’s reading of 78.1. Consumer discretionary had been in correction territory since June 8 and may have limited near-term downside.
As virus cases have ticked up and states have paused reopenings, consumers are watching their wallets carefully after having sent retail sales up 7% year-over-year in June, the first few weeks of which were more upbeat on the virus front.