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Nasdaq ETF's Worst Day Since October: Stocks That Survived

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Sanghamitra Saha
·3 min read
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The Nasdaq dropped 3.52% on Feb 25 for its worst session since October on rising rate worries. The slide was mainly triggered by the pain in tech stocks that had staged a superb rally in the pandemic-stricken 2020 on extremely low interest rates and the stay-at-home-induced rising digitization. Nasdaq has rallied 42.3% in the past one year due to the surge in tech stocks (read: 5 Stocks Powering the $1B NASDAQ Next Gen ETF (QQQJ)).

However, the investing scenario changed totally as we entered 2021 on vaccine distribution and hopes of a hefty fiscal stimulus in the United States under the Biden administration. This boosted reflationary trade, pushing long-term treasury yields higher and favoring value stocks over growth ones.

The reason was the sudden jump in benchmark U.S. treasury yield, which topped 1.6% lately, marking the highest level since February 2020. The strong risk-on trade sentiments caused this movement. No wonder, growth-oriented tech stocks — so far aided by low rates and carrying overvaluation concerns — started being dumped by investors.   

The worst losers on the Nasdaq-100 Index were ANSYS Inc. (ANSS) (down 12.2%) and Applied Materials (down 7.23%) on Feb 25. High-flying tech names were also hammered, with FAAMG (Facebook, Apple, Amazon, Microsoft, Google) losing about 3.6%, 3.5%, 3.2%, 2.4% and 3.3%, respectively.

Against this backdrop, below we highlight a few Nasdaq-100 stocks that gained or lost a little on Feb 25 and successfully averted the bloodbath in the index.

Stock Winners

Moderna MRNA – Up 2.48%

This clinical-stage pharmaceutical company is known for its COVID-19 vaccine. The company is primarily focused on discovering and developing messenger RNA (mRNA) based therapies. The company has several early to mid-stage pipeline candidates targeting multiple indications including cancer and cardiovascular. It is also developing a few prophylactic vaccines and cancer vaccines. The stock has a Zacks Rank #1 (Strong Buy).

T-Mobile US Inc. TMUS – Up 1.26%

The Zacks Rank #3 (Hold) company is a national wireless service provider. The company offers its services under the T-Mobile, Metro by T-Mobile and Sprint brands. T-Mobile, through its subsidiaries, provides wireless services for branded postpaid and prepaid, and wholesale customers.

Cisco Systems Inc CSCO – Down 0.48%

Zacks Rank #3 Cisco Systems Inc. is an IP-based networking company offering products and services to service providers, companies, commercial users and individuals.

Mondelez International Inc MDLZ – Down 0.53%

Zacks Rank #3 company is one of the leading global snacks company. Mondelez was previously known as Kraft Foods, Inc. and changed its name to Mondelez following the spin-off of its North American grocery business into a separate independent company, Kraft Foods Group, Inc. in Oct 2012. Kraft has, however, merged with H.J. Heinz Company to form The Kraft Heinz Company.

Alexion Pharmaceuticals ALXN – Down 0.54%

The Zacks Rank #3 biopharmaceutical company is focused on the development and commercialization of life-transforming drugs, for the treatment of patients with ultra-rare disorders.

Activision Blizzard Inc ATVI – Down 0.62%

The Zacks Rank #3 company is a leading developer and publisher of console, online and mobile games. The company’s Call of Duty is one of the most popular gaming franchises globally. Its Overwatch League can be considered a pioneer of the esports concept. The company was a pandemic winner and is expected to carry on the winning momentum.

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