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Technology stocks popped on Friday, while the
Dow Jones Industrial Average
fell and bond yields dipped alongside a new surge in Covid-19 cases.
Futures for the Dow indicated an open 254 points, or 0.7% lower, after the index slipped 60 points Thursday to close at 35,870. Futures for the
S&P 500
signaled a 0.3% drop after the index closed at an all-time high Thursday. The technology-heavy
Nasdaq Composite
was poised to open 0.4% higher.
The 10-year Treasury yield fell to 1.54% from a Thursday close of 1.61%. That’s a steep drop for one day, bringing it farther below its second half 2021 peak of 1.7%, hit in late October.
That bodes well for the tech trade. Lower bond yields make futures profits more valuable—and fast-growing companies in the sector are expecting a large share of their profits to come many years down the line.
Ultimately, market participants are rushing into safety Friday. The drop in the yield means investors are buying up the bond, sending the price higher. This comes as new Covid-19 cases perk up in Europe, prompting Austria to announce lockdowns beginning next week.
Also not helping investors’ appetite for risk was economic data out of Germany. The countries’ producer-price index gained 3.8% month-over-month, higher than the expected 1.9% and above the previous result of 2.3%. Such strong inflation could compel the European Central Bank to hike interest rates, which could choke off economic growth, ultimately lowering inflation. ECB President Christine Lagarde said Monday morning that the central bank is currently unlikely to raise rates in 2022. Still, economic data will help guide monetary policy.
The price of oil also dropped. WTI crude oil fell 3.1% to $76.53 a barrel. It’s down 9% from its 2021 high of more than $84 a barrel hit on Nov. 9.
Oil stocks slid, too. The
Energy Select Sector SPDR
Fund (XLE) fell more than 2%. It’s down just over 6% since the end of October when it hit a 2021 high.
Overseas, Hong Kong’s
Hang Seng
Index fell 1.1%, underperforming other bourses in Asia as it was weighed down by a stark fall in
Alibaba
(ticker: BABA and 9988.H.K.) stock following the Chinese e-commerce giant’s quarterly results Thursday that showed slowing growth. The pan-European
Stoxx 600
was down 0.5%.
Here are six stocks on the move Friday:
Intuit
(INTU) stock gained 12% after the company reported a profit of $1.53 a share, beating estimates of 97 cents a a share, on sales of $2 billion, above expectations for $1.8 billion.
Williams-Sonoma
(WSM) stock dropped 7.2% after the company reported a profit of $3.32 a share, beating estimates of $2.56 a share, on sales of $2.1 billion, above expectations for $1.8 billion.
Foot Locker
(FL) stock dropped 6% even after the company reported a profit of $1.93 a share, beating estimates for $1.37 a share, on sales of $2.19 billion, above expectations for $2.15 billion.
Alibaba tumbled 10.7% in Hong Kong following downbeat results Thursday that saw its U.S.-listed stock drop more than 11%. The U.S. stock was down slightly in the U.S. premarket.
Nvidia
(NVDA), which has been on a tear this week—up near 6% over the last five days—was rising again, climbing near 1.2% in U.S. premarket trading.
Workday
(WDAY) was sliding, down 7.7% in the premarket, despite posting better-than-expected earnings late Thursday.
Write to Jacob Sonenshine at jacob.sonenshine@barrons.com
Read More:Stock Market Today: Dow and Oil Drop as Covid Fears Grip Europe While Tech Rises
2021-11-19 13:09:00