Day Traders Diary

9/29/21

The major averages closed mixed with as the technology sector struggled again as the 10-year Treasury yield traded volatilely. The Dow Jones Industrial Average rose 91 points, or 0.2% while the S&P 500 rose 6 points or 0.1%. The tech-heavy Nasdaq Composite was the laggard, falling 34 points or 0.3%. The moves came after the Nasdaq Composite posted its worst day since March on Tuesday amid a spike in bond yields.

The 10-year Treasury Treasury yield eased on Wednesday morning to trade near 1.5% but bounced back toward 1.54% in afternoon trading. The yield touched a high of 1.567% Tuesday, the current high-water mark for a weeklong run that has put pressure on growth stocks.

Tech stocks, which were hit hardest during Tuesday's market rout, struggled to hold on to a rebound on Wednesday. Shares of Apple rose more than 1%, and Netflix jumped more than 3%, but shares of Amazon and Alphabet declined. The Nasdaq was in the lead when the market opened but fell behind the other major averages as the session progressed and Treasury yields recovered.

U.S. stocks rose slightly on Wednesday but the technology sector struggled again as the 10-year Treasury yield traded volatilely.

The Dow Jones Industrial Average rose 80 points, or 0.2%, and the S&P 500 was up 0.1%. The tech-heavy Nasdaq Composite was the laggard, falling 0.3%. The moves came after the Nasdaq Composite posted its worst day since March on Tuesday amid a spike in bond yields.

The 10-year Treasury Treasury yield eased on Wednesday morning to trade near 1.5% but bounced back toward 1.54% in afternoon trading. The yield touched a high of 1.567% Tuesday, the current high-water mark for a weeklong run that has put pressure on growth stocks.

Tech stocks, which were hit hardest during Tuesday's market rout, struggled to hold on to a rebound on Wednesday. Shares of Apple rose more than 1%, and Netflix jumped more than 3%, but shares of Amazon and Alphabet declined. The Nasdaq was in the lead when the market opened but fell behind the other major averages as the session progressed and Treasury yields recovered.

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Meanwhile, defensive stocks performed well as the utilities sector outperformed. Additionally, aerospace giant Boeing rose more than 3% to be one of the the best performers in the Dow. Energy stocks rose again even as natural gas prices pulled back sharply.

Semiconductor stocks dipped after Micron gave an earnings and revenue outlook for the first quarter of 2022 that missed consensus estimates. Nvidia and Advanced Micro Devices also declined.

Meanwhile, shares of discount retailer Dollar Tree jumped 16%, making it a top performer in the S&P 500, after the company announced that it was increasing its stock buybacks and experimenting with higher prices in some locations.

The issues for chipmakers and price hikes by retailers come amid growing concern about supply chains, which have seen continued disruptions from the Covid-19 pandemic.

Fed Chair Jerome Powell said at a European Central Bank event on Wednesday that it was "frustrating to see the bottlenecks and supply chain problems not getting better, in fact at the margins apparently getting a little bit worse. We see that continuing into next year probably, and holding up inflation longer than we had thought."

Investors were also watching debates around the debt ceiling and government spending in Washington. Treasury Secretary Janet Yellen told House Speaker Nancy Pelosi Congress has until Oct. 18 to raise or suspend the debt ceiling and that failure to do so would have severe consequences for the economy. JPMorgan Chase CEO Jamie Dimon said the bank was prepping for the possibility of the U.S. hitting the debt limit.

Senate Majority Leader Chuck Schumer is pushing for his chamber to vote on a bill on Wednesday that would extend government funding through early December, while the House of Representatives was preparing to vote on a bill that would raise the federal debt limit.

On the economic data front, pending home sales rose 8.1% in August, according to the National Association of Realtors, well above the 1.2% expected by economists surveyed by Dow Jones.

On Tuesday, the Nasdaq Composite dropped 2.83% to 14,546.68 for its worst day since March. The S&P 500 shed 2.04% and the Dow Jones Industrial Average lost 569.38 points, or 1.63%.

The Dow and S&P are now down 2.6% and 3.5%, respectively, for September. The Nasdaq is down more than 4.5%.

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