Day Traders Diary

11/23/21

The major averages closed mixed as the Dow Jones rose nearly 200 points while the Nasdaq Composite fell sharply for the second-straight day as higher interest rates appeared to put pressure on high-flying tech stocks, but banks and industrial names moved higher in a split market on Tuesday.

The tech-heavy index fell 79 points or 0.5%, while the S&P 500 rose 7 points. The Dow Jones Industrial Average rose 194 points on the strength of bank and energy stocks.

Social media giant Meta, the parent company of Facebook, fell more than 1%, while Roku slid more than 2% and biotech stock Moderna dropped more than 4%. Shares of Zoom Video Communications tumbled 17% a day after it beat earnings estimates but warned of a slowdown ahead as the Covid pandemic winds down and the demand for remote contact decreases

The decline in tech and other growth stocks comes as Treasury yields have jumped following President Joe Biden's decision to renominate Fed Chair Jerome Powell. Higher rates are often seen as a negative for high-growth companies because their future earnings look less attractive as short-term yields rise.

Bank stocks also rose along with rates, with shares of JPMorgan climbing more than 2%.

Powell's renomination was generally welcomed by Wall Street, but the moves in the Treasury market have been sharp. The benchmark 10-year Treasury yield was trading near 1.66% on Tuesday, up from about 1.54% on Friday. Yields move opposite of prices.

In other earnings news, shares of Best Buy also fell sharply after the company said comparable sales and gross profit margin might decline in the fourth quarter compared to the year ago period.

On the positive side, chipmaker Western Digital was one of the best performers in early trading following an upgrade from Mizuho. Energy stocks also moved higher even after President Joe Biden announced on Tuesday that he would tap the strategic petroleum reserve in an attempt to lower gas prices at a time when inflation is running at its highest level in three decades. The price of oil had declined in recent days amid rumors that Biden would take this step.

Tuesday's moves come after the market slid into the close on Monday after the S&P 500 and Nasdaq had hit intraday records earlier in the session. The Nasdaq closed down 1.26%.