On Thursday, with the S&P 500 and the Nasdaq both breaking new highs, the New York Stock Exchange ended on a cautious note. The session was marked by a rotation at the loss of cyclical in place of growth stocks, like technology. The day after the formal inauguration of Joe Biden as the 46th president of the United States, investors are expecting that Congress will easily implement its stimulus plan. The ECB has maintained its ultra-accommodative monetary policy in Europe, and its president, Christine Lagarde, has highlighted the short-term risks still weighing on growth while finding these risks to be ‘less pronounced’ in the medium term.
At the close, the Dow Jones finally gave up a tiny 0.04 percent to 31,176 points, led by profit-taking, particularly on Chevron (-3.5 percent), Boeing (-1.9 percent ), after its record on Wednesday. The S&P 500’s large index rose 0.03 percent to 3,853 points, a new record, while the Nasdaq Composite index, which is rich in electronics and biotech stocks, rose more freely, by 0.55 percent, to a new peak of 13,530 points (after 1.97 percent on Wednesday). The three indices finished at record highs the day before.
It should be noticed that eight of the eleven S&P 500 industry indices ended lower, reflecting a certain wait-and-see mentality, though valuations in stock markets are considered high. Cyclical stocks, though “techno” and GAFA rose, took profits. The technology index gained 1.3%, communication services advanced 0.2% and luxury consumer goods gained 0.5%. Energy (-3.4 percent), basic materials (-1.5 percent), financials (-1 percent) and industrials (-0.8 percent) sectors are at the bottom of the pack.
Alphabet advanced 0.2% (after up 5.3% on Wednesday), Facebook took 2% (after 2.4%), Amazon advanced 1.3% (after 4.5%), Microsoft received 0.28% (after 3.6%) and Apple ascended another 3.6% after a 3.2% climb on Wednesday. In comparison, Netflix gave up 1.1 percent following its 16.8 percent surge on Wednesday due to its better-than-expected fourth-quarterly results.