The markets closed in the green with the DOW seeing the most volatility being dragged by Caterpillar, JP Morgan, and Travelers while the NASDAQ continued to be the outperforming index. The Final Round panel discusses the latest.
SEANA SMITH: Welcome back to The Final Round here on Yahoo Finance. I'm Seana Smith. We saw some selling here accelerating into the close. It's going to be a photo finish with the Dow. It keeps flopping-- flip-flopping right around into positive and negative territory.
We are right at the flatline right now. Taking a look at the biggest gainers in the Dow, some of those, Home Depot amongst that, Salesforce, Dow Inc. up over 2%. But then when you take a look at the laggards, Caterpillar off over 3%, JP Morgan off just around 3%.
And that does it for the trading day today. It looks like all three of the major averages holding onto gains as we just closed the trading day. Dow barely positive, so we'll see how things go as we shake out the final trades here today.
Taking a look at some of the winners and some of the losers here in the Dow, underperformers, Caterpillar, like I said before. That's off just around 3%. JP Morgan down around 3%. Travelers, another name trading to the downside here, off just around 2%.
The S&P looks like we are crossing above-- it looks like we are closing above 3,400. That was the level that we were watching here heading into the close. The S&P closing up just around half a percent. And the NASDAQ pushing further above 11,000, closing up today over 1%. And the NASDAQ outperforming, once again.
And we can see that when we take a look at the sector action, technology and communication services amongst the outperformers today, as well as real estate, utilities, industrials, materials, just some of these sectors here holding on to gains. The defensive cyclical trade getting some attention today. Financials, on the other hand, continuing to underperform. We have the XLF off just over 1%. The KBW Banking Index off just around 2% today, as we see some of the big banks here under a little bit of pressure.
Well, I want to bring in my co-host for the next 60 minutes, Myles Udland. We're also joined by Ines Ferre, Akiko Fujita, and Jared Blikre to help us break things down. And Myles, you were just talking to John Stoltzfus last hour from Oppenheimer. And it was interesting, because he was talking about some of the rotation that we're seeing in the markets here after we saw a big dispersion amongst the sector performance over the last couple of months. But when you take a look at some of the broad gains across the board today and where we closed, what stands out to you in today's market action?
MYLES UDLAND: Yeah, I mean, I think-- so we continue to get a rotation type of day, where-- you know, where we're seeing-- and I think that's sort of the healthy action that everyone has been calling for on this show and anywhere else you go in financial media that you can't have just the FANG names do all the work every single session. And you know, John was highlighting over the last handful of sessions, really since the beginning of the month, you know, we've seen materials and health care get more involved in the rally, you know, as well as consumer discretionary.
But I think for me the thing that stands out is, yet again, we are talking about a financial sector that is lagging the overall market. And obviously, there are going to be structural challenges for the banks at 0% rates. But I think it's-- I think it's an old Dick Bove line, and I don't think this is really breaking tons of news, right, but if you think about how to think about financials it's they're a levered bet on the economy. If the economy does better, then the financial sector, in general, is going to do better. Same on the opposite direction.
So if the market, with some of those styles we just highlighted, is sniffing out a cyclical recovery, well, the financials have-- have gotten like a half invite, like, you know, you can come when everybody else has left the party, something along those lines. So I think that's still a place that I think bears watching on a daily basis for kind of how the market continues to broaden out this rally, what investors are kind of suggesting their view is on this rally, and kind of the durability of the economic snapback as we get through, you know, a quarter that we kind of know what the third quarter is going to be like. We're going to see a huge double-digit growth number on GDP. And I think, you know, a lot of real-time data suggests there are some open questions about how much that continues as we get into the fourth.
SEANA SMITH: Yeah, it certainly is a big question here over the next couple of weeks. So Jared, when we take a look at the market action today, financials, yes, underperforming, like Myles said. But when we take a look at the outperformers, once again, NASDAQ and S&P closing higher, and a big reason for that is the gains that we're seeing, once again, in the tech and the communication services sectors.
JARED BLIKRE: Yeah, communication services highlight today, along with tech, and don't count out utilities and real estate too. Let's actually take a look at the NASDAQ 100 here, and Apple managed to finish in the green. And the other FANG stocks up more than 1%.
Facebook up 2%. You look at Netflix up 4%. I'll say Alphabet, Facebook, and Netflix together make up about 50% of the communication services industry. So when you put them all together, it's not surprising that it was a leader today.
And then you take a look at some of the other leaders. Now, materials, which was slightly underperforming today, that's XLB here, that has been on a tear, and that's reflective of the reopening trade and the need for raw materials. Companies like Dow, or anybody who pulls stuff out of the ground, they've been doing fairly well recently.
Now, financials have been a sore spot for a couple of reasons over the last two days. Yesterday, Citigroup had some problems. They're down another 7% today. They accidentally sent $900 million to the wrong client, and it looks like their internal controls are just a little bit lackluster. They're going to pay a fine for that.
JP Morgan had an issue today. They had to-- they had to send some traders home, and that comes ahead of their planned reopening in Midtown. I think they're going to have more traders coming into the office next week, so that might be an issue.
But if we can pull up a chart here of the financials-- let me see if I can get back to it-- this is something I highlighted in the last hour. You know, they've been consolidating for some time here, and they're ready to break out. And my theory is they're going to be leading the general market. So here's a year-to-date chart. Here's a 50-day moving average. Here's a 200-day moving average.
And it could be as simple as this, you know, we get the FOMC announcement tomorrow. Typically, the bond market gets a lot of volatility, and you do see the financials move. Barring some kind of head fake, you know, if we end up strongly tomorrow afternoon that could be a risk-on signal. Conversely, if we sell-off during the Powell presser, which we've seen happen many times before, well, you know, we could end up going south with stocks.
SEANA SMITH: Certainly. That's a big question that everyone wants to know the answers to. And Ines, I know you've been talking with traders on the floor here over the last couple of weeks, just in terms of what they're watching. And when we don't see the participation from the financials, and we take a look at the fact that a lot of the sectors here that continue to lead this rally, they have been crowded trades, yet investors continue to pile in, what are they making of that trend and some of the stocks that they're watching?
INES FERRE: Well, they're definitely watching to make sure that the rally really is broadened. So as Myles was talking about, financials lagging, making-- trying to get a little bit more participation in some of the other sectors. But I've been watching a couple of story lines that we've been following over the last couple of days, and Nikola definitely being one of them.
I know that we're going to talk about Nikola later in the show. But that Hindenburg research, the response to Nikola's response yesterday was damning, once again, for Nikola, with the stock down 8%. And Hindenburg basically saying that they posed more than 50 questions, and Nikola only addressed 10 of them.
I've also been watching Apple and the unveiling of the Apple-- the Fitness Plus app. So that's been interesting to watch, what that did to Peloton today. Peloton dipped by about 5% after that announcement and then rebounded some.
And then, of course, I've also been watching the story line of Oracle and TikTok to see what happens there. President Trump saying that a TikTok deal is very close, and so what kind of deal would this be? What is it-- what is it comprised of? Is Walmart part of that deal? So I think that just watching those story lines and seeing what happens with all of this, how this all unravels has been interesting to watch.