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S&P 500 Takes Breather Following Biggest One-Day Gain Since June

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·3 min read
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By Yasin Ebrahim

Investing.com – The S&P 500 was flat Tuesday following its biggest one-day gain since June a day earlier, but downside, led by selling in tech, was offset by gains in materials.

The S&P 500 fell 0.14%, the {169|Dow Jones Industrial Average}} rose 0.07%, or 23 points, and the Nasdaq Composite fell 0.8%. The S&P 500 rallied 2.4% on Monday, its biggest daily gain since June.

Tech was one of the biggest decliners on the day, as big tech including Apple pared some gains from a day earlier.

Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Amazon.com (NASDAQ:AMZN), while Alphabet (NASDAQ:GOOGL) and Facebook (NASDAQ:FB) traded above breakeven. A nearly 2% decline in semiconductor stocks also pressured tech.

Some analysts continue to remain wary of a bigger correction following a wobble in stocks late last month.

"U.S. markets are within a reflationary expansion cycle (secular bull market) on a longer-term basis- but remain extended over the short-run. Continue to watch for a bigger correction ahead (upwards of -10-15%)," Janney Montgomery Scott said in a note.

Zoom Video Communications (NASDAQ:ZM) bucked the trend lower in tech after the video conferencing software maker reporting better-than-expected fourth-quarter results and touted an upbeat performance for the year ahead.

The results eased investor concerns about the impact on the company's growth as economies reopen and employees return to work.

"Zoom reported another strong showing in 4QFY21 to wrap up a stellar year," Oppenheimer said. "Looking ahead, our attention turns to the operating environment in a postpandemic world, and the pace of G2K penetration, Zoom Phone adoption, and what direction churn (especially with small customers) ultimately takes."

Consumer discretionary was also among the biggest decliners, led by a fall in Target .

Target (NYSE:TGT) fell more than 4% as the retailer's lack of guidance overshadowed fourth-quarter results that beat on both top and bottom lines, underpinned by digital sales that more than doubled.

Energy, meanwhile, was up modestly as oil prices stayed in the green amid tensions between Saudi and Russia over whether stick or twist on output cuts made last year, with days to go until meeting between major oil produces due Thursday.

In its latest supply and demand outlook presented to the technical meeting, OPEC reportedly forecast crude oil inventories to fall by about 400 million barrels in 2021.

Materials were one of the few sectors in the green, underpinned by gains in Newmont Goldcorp (NYSE:NEM), Mosaic (NYSE:MOS) and Dow Inc (NYSE:DOW).

Dow Inc rose to a record high after Wells Fargo (NYSE:WFC) upgraded its rating on the company to overweight from equal weight, and lifted its price target on the stock to $77 from $60, on expectations for boost to earnings this year from strong demand and the recent winter storm supply.

In other news, Rocket Companies (NYSE:RKT) surged 32%, with some attributing the move higher to Reddit-inspired action as the stock has large number of bearish, or short, bets placed against it.

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