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Markets Post in the Green on Tech Value, Rotation

Mark Vickery

Market indexes broke their three-day losing streaks to all finish high Wednesday. Not on any new economic data or major earnings reports, but at more attractive valuations for many Nasdaq stocks (which had fallen into correction territory over the past few sessions), along with some continued rotation into other industries besides Tech. The Nasdaq led the way, up 2.71%, or 298.87 points to 11,141.56; the S&P 500 rose 2.01%, 67 points to just under 3400; the Dow was +1.6%, up nearly 440 points to 27,940; and the small-cap Russell 2000 grew 1.4%, almost 22 points to 1526.

Though this was the best single trading day for the S&P 500 since June 5 — and the Nasdaq’s biggest one-day jump since April 29 — the indexes began to melt away minutes prior to the closing bell. This might be a good thing, keeping some powder dry to continue the comeback story to start off Thursday trading, or it might be a quick cooling off in resistance to rushing right back into bubble status the markets have been dancing with most of the past month. The Dow had been up around 700 points during the trading day, but put the brakes on late in the day.

Building Products is one of those industries investors are finding favor with, such as Zacks Rank #1 (Strong Buy)-rated BlueLinx BXC, which gained more than 5% Wednesday. Jeld-Wen Holding JELD, another Zacks Rank #1 and a supplier of doors, siding and other refurbishing home products, rose 2.3%. These companies reflect the burgeoning strength in Household Formation stocks, including remodeling and refurnishing businesses. Sherwin-Williams SHW was up 3.75% on the day.

AstraZeneca AZN took a bit of a dip, but nothing too deep, following news that it was pausing its phase-3 Covid-19 vaccine candidate to account for an as-yet unexplained illness to one of its trial patients. Market participants seem aware that such pauses are not a deathknell for phase-3 testing, but are a responsible and often necessary component of testing in late-stage drug trials.

The AstraZeneca candidate, being jointly developed with Oxford University and widely believed to have a jump on the coronavirus treatment competition (Oxford had earlier worked to develop coronavirus vaccines and proven some efficacy and safe usage in non-human subjects), may be experiencing a set-back at present, lost 2% in regular trading, but have regained roughly half of that stock value in late trading.

Tomorrow morning brings us new Initial Jobless Claims, which pointed back in the right direction for the first time in a few weeks, and are now expected to come in below last week’s reported 881K. The two weeks prior both posted weekly tallies over the 1 million mark. Continuing Claims from two weeks ago were still totaling more than 13 million claims, still miles away from where we were before the pandemic crisis hit.

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The SherwinWilliams Company (SHW) : Free Stock Analysis Report
 
AstraZeneca PLC (AZN) : Free Stock Analysis Report
 
BlueLinx Holdings Inc. (BXC) : Free Stock Analysis Report
 
JELDWEN Holding, Inc. (JELD) : Free Stock Analysis Report
 
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