Investors were buying the dip on tech stocks by midday Thursday, while risk sentiment was still shaky.
The S&P 500, after having fallen in the morning on the weakness of big tech, rose as much as 075%. The tech-heavy Nasdaq rose as much as 1%. The 10-Year Treasury yield was flat at 0.67%. Yields fall when prices rise. The yield is stuck — it can’t rise because the Federal Reserve is buying too many trashy bonds, but it can’t fall because it is already below expected inflation.
The Nasdaq 100 was down as much as 13% between September 2 and Thursday morning, but it rose 1% Thursday, as investors bought the dip. Apple (AAPL) - Get Apple Inc. (AAPL) Report rose as much as 2%. Growth tech has undergone a valuation re-rating after historical outperformance of value stocks. It was large cap tech lifting the major indices.
Cyclicals were mixed, with large cap consumer discretionary and oil mostly down a tick. Banks and manufacturing rose a few tenths of a percentage point.
Jobless claims for the past week came in at 870,000, barely budging from last week’s result. The recovery in the job market has stalled of late, causing concerns that the V-shaped economic recovery is losing its shape. That had cyclicals down in the morning, especially as Congress seems nowhere near a finalized fiscal stimulus bill, which small businesses and households desperately need.
Positively, Dr. Fauci told Congress a coronavirus vaccine could be on the way in months and could reach 700 million distributed doses by April. That would get people out of their homes more, but liquidity for many parties in the economy remains a problem.
Plus, European stocks were down as virus cases are ticking up and travel restrictions are being reinstated. That’s pressuring U.S. airline stocks, which fell between 1% and 2%.