Frothy Stocks Get Much Needed Pullback

Here is a daily recap of the S&P 500 broken down by sector followed by sector heat map as frothy stocks get much needed pullback. Stocks in heat map are based on the top 10 holdings of each sector ETF. Click on each picture to zoom in. Below is a summary of today’s action on Wall Street provided by CNBC:

Dow futures fall 100 points as Wall Street braces for another drop after Thursday’s sell-off

U.S. stock futures fell on Thursday night following a massive decline sparked by tech shares during regular trading. Dow Jones Industrial Average futures dipped 101 points, or 0.4%. S&P 500 futures were down by 0.4% and Nasdaq 100 futures slid 0.8%.

The S&P 500 (SPY) slipped -0.81% today. Sector decliners led advancers 8 to 3 as shown below in the sector graph. Losses ranged from -1.83% to less than 1%. Financials (XLF), industrials (XLI) and materials (XLB) enjoyed minor gains of less than 1%.

The Dow Jones index lost -159 points (-0.56%) to close at 28,153. The Nasdaq declined -144 points (-1.27%) to settle at 11,313.

Frothy Stocks Get Much Needed Pullback

Stocks were able to climb out of a hole on Friday but still finishing in the red.

Shares of major tech companies closed mostly lower. Facebook, Amazon and Alphabet all lost more than 2%. Netflix slid 1.8% and Microsoft dropped 1.4%. However, Apple ended the day up 0.1% after falling as much as 8.3%. Tesla also erased a drop of more than 8%, ended the session up 2.8%.

“We’ve had excessive valuations in the markets lately — particularly in the tech sector — and that needed to be corrected to some degree,” said Scott Knapp, chief market strategist at CUNA Mutual Group.

Tech’s decline this week led the S&P 500 and Nasdaq to snap their respective five-week winning streaks. The S&P 500 fell 1.8% this week and the Nasdaq declined by 3.7%. The Dow fell 2.3% this week.

Labor Market Update

The U.S. unemployment rate fell to 8.4% last month from 10.2% in July, the Labor Department said. Economists polled by Dow Jones expected the rate to decline to 9.8%. As for overall jobs creation, employment in the U.S. grew by 1.37 million in August, topping an estimate of 1.32 million.

Key Takeaway…

Notable S&P 500 Movers…

Below I’ve highlighted some notable S&P 500 movers (both winners & losers).

Credit: Sector Graph provided by Sector SPDR app. Sector breakdown provided by Charles Schwab. Sector heat map provided by finviz. Information Credit: News Headlines and quotes were taken from CNBC in the writing of this post.

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9/4/20

S&P 500 Sector Graph

Frothy Stocks Get Much Needed Pullback

S&P 500 (SPY)

Frothy Stocks Get Much Needed Pullback

Communication Services (XLC)

Frothy Stocks Get Much Needed Pullback

Episode 1: Basic Investment Strategy – Simply Stock Info: The Podcast

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Consumer Discretionary (XLY)

Frothy Stocks Get Much Needed Pullback

Consumer Staples (XLP)

Frothy Stocks Get Much Needed Pullback

Energy (XLE)

Frothy Stocks Get Much Needed Pullback

Financials (XLF)

Frothy Stocks Get Much Needed Pullback

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Real Estate (XLRE)

Healthcare (XLV)

Industrials (XLI)

Materials (XLB)

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Technology (XLK)

Frothy Stocks Get Much Needed Pullback

Utilities (XLU)

S&P 500 Sector Heat Map

 

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