Midday Update: Tech Stocks Drag Down a Largely Optimistic Market

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The major U.S. indices were held back significantly by a drop in big the stocks by midday Wednesday, as investors look ahead to tech earnings. Overall, sentiment was strong. 

The S&P 500, after having gained 1.3% in the morning, moved to a gain of less than 0.2% by midday. The tech-heavy Nasdaq fell as much as 0.5%. The 10-Year Treasury yield did fall to 0.62%, even as economically sensitive groups of stocks rose. 

Late Tuesday, Moderna  (MRNA) - Get Report said its first human testing in the U.S. for its coronavirus vaccine yielded positive results. The stock was up 7% by midday. 

All day, cyclical stocks were powering ahead, coming off of a correction since June 8 as virus cases had ticked up. But bank earnings have rolled in largely positively, as large banks are powering through economic turbulence with strong trading and investment banking revenues. Bank stocks are up almost 3% this week. Goldman Sachs  (GS) - Get Report beat earnings estimates handily and the stock rose as much as 3%. 

Elsewhere, consumer discretionary, oil, industrials and small caps were rising significantly Tuesday. 

As for tech, investors are getting wary of stretched valuations into earnings, as tech has had a big run-up. Netflix  (NFLX) - Get Report and Microsoft  (MSFT) - Get Report have earnings this week and were down 2% and 1%, respectively by midday. The NYSE FANG index is down more than 1% Wednesday and about 3% on the week, weighing heavily on the S&P 500. 

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