Arab Today, arab today mixed week for us stocks as tech suffers
Last Updated : GMT 23:12:04
Arab Today, arab today
Arab Today, arab today

Mixed week for US stocks as tech suffers

Arab Today, arab today

Arab Today, arab today Mixed week for US stocks as tech suffers

New York - AFP

US stocks had a mixed week with the broader market rising on better economic data, but technology stocks faltering on concerns about a downturn in the bubble-prone sector. The Dow Jones Industrial Average added 89.65 (0.55 percent) at 16,412.71, while the broad-based S&P 500 tacked on 7.47 (0.40 percent) at 1,865.09. But the tech-rich Nasdaq Composite Index, after rallying in the first part of the week, finished with a net loss of 28.03 (0.67 percent) at 4,127.73 following big drops on Thursday and Friday. David Levy, portfolio manager at Kenjol Capital Management, said overall market sentiment was "neutral" but "cautious." Investors are scratching their heads given that technology stocks have been "leaders" in the bull market, he said. "Because there's a lack of leadership, the market is probably more cautious," Levy said. "It's hard to find a catalyst to buy into this market at this point." It was not a bad week overall for the markets. The S&P 500 even hit record closes on Tuesday and Wednesday. Most of the week's economic data were fairly solid, if unspectacular. Reports from the Institute for Supply Management showed rising activity for both manufacturing and services sector. On the downside, the US trade deficit rose sharply in February. But the week ended with a decent jobs report from the Department of Labor, which said the US added 192,000 jobs in March. The report also revised job growth in January and February upward by 37,000 jobs. "The post-winter rebound we hoped for did not happen, but the winter hit was smaller than previously believed," said Ian Shepherdson of Pantheon Macroeconomics. Analysts remained guarded given the weakness in technology stocks. The Nasdaq lost 2.6 percent alone on Friday with deep losses extending from so-called glamour stocks like Facebook (-4.6 percent) and Netflix  (-4.9 percent) to larger companies like Google (-4.7 percent) and Apple (01.3 percent). "It's all been momentum," said Michael James, managing director of equity trading at Wedbush Securities. "As the stocks go lower and continue to go lower, portfolio managers have to react. They may not want to be selling stocks, but they can't allow this to keep going." Most analysts do not believe the Nasdaq faces another retreat like the one in the early 2000s when the bursting of the so-called tech bubble precipitated a fall in the index of more than 75 percent from the all-time high in 2000. For one thing, many of the sector's favored companies are profitable. There may be some companies that are overvalued, but not as many and not by as much. "I would not say it's 1999," said Alan Skrainka, chief investment officer at Cornerstore Wealth Management. "It's a very select group, including the biotech names, that investors really need to be careful with." That said, Skrainka said he is not advising a "buy the dip" approach. Levy said the upcoming earnings season will be "very important," especially for the technology sector. A strong technology earnings season could stabilize the Nasdaq, while disappointing results could trigger deeper losses, he said. Next week's calendar includes the first round of major earnings reports, with results from Alcoa and banking giants JPMorgan Chase and Wells Fargo. Most major technology earnings reports will be released later in April. Next week's agenda will also include the release of minutes from the US Federal Reserve's March 18-19 monetary policy meeting, which could shed additional light on the debate inside the central bank on the outlook for raising benchmark interest rates.

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