Midday Market Update: Value Overtakes Growth as Stimulus Hopes Brighten

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Stocks rose Thursday in a rally lead by value over growth. Fiscal stimulus has reemerged as distinct possibility.

The S&P 500 rose 0.65%, with the growth tech-heavy Nasdaq up 0.55%. The 10-Year Treasury yield, which has run up of late, was down a tick to 0.77%. Yields fall when prices rise.

After President Trump said this week that fiscal stimulus should wait until after the election — an outcome that would put immense pressure on cash-starved small businesses not fully reopened — news has emerged that House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin are resuming talks on a bill that could total more than $2 trillion and include checks to households and a paycheck protection program for small businesses. Pelosi also implied she prefers not to have stimulus for airlines unless there is a larger stimulus bill. 

Value stocks rose, with the Vanguard S&P 500 Value ETF  (VOOV) - Get Report up 0.9%. FAANG stocks were up just a few tenths of a percentage point. Apple  (AAPL) - Get Report, which sold off in September and has an iPhone 12 and earnings potential stock catalyst upcoming, was up just 0.2%. In premarket trading, Apple was up 1% and big tech was outpacing value.

Economically sensitive stocks like consumer discretionary, banks and oil rose. Some manufacturing stocks rose more than 1%.

Interestingly, defensive stocks were more than participating in the rally. Large cap consumer stapes rose about 0.5% and outpaced the more slight gains in discretionary. The Dow Utilities Index rose about 1%. The NYSE Healthcare index rose 0.7%. This all signals some preference amongst investors to hold stocks that can ride out economic turbulence, although risk sentiment in the equity market was indeed strong. 

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