Wall St. starts off May on strong footings; growth stocks lag

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Wall St. starts off May on strong footings; growth stocks lag

On Monday, a slew of Wall St. stock indices had closed out the session in a fairly upbeat tenure, though a persistent weakness in top-tier tech shares alongside so-called growth stocks led to a decline in Nasdaq, as a latest cohort to rotate into cyclicals came into play following largely upbeat quarterly earnings’ reports last week.

Aside from that, defensives and other shares which are expected to be benefitted by the most following a “strong reopening” of the economy, continued to gather momentum. Nonetheless, in the day’s ISM data that underscored a slowdown in US factory activity, accountable for roughly 11.3 per cent of entire US economy, had barely made an impact in the Wall St.

amid high-flying optimisms of a broader reopening of the economy, however, the ISM survey report that showed its index for US national factory activity plunged to 60.8 last month from a nearly four-decade high clocked a month earlier amid a bottlenecked supply chain, would more likely to have long-lasting repercussions, suggested analysts.

However, economy-sensitive cyclicals in S&P 500 including energy and materials had largely outperformed housing and tech stocks in the day’s Wall St. as oil service provider Baker Hughes led the tally of gains with an upsurge of 8 per cent.

Wall St. starts month on strong footings as cyclicals rise

Citing statistics, in the day’s Wall St. round off, trade-sensitive Dow climbed 0.7 per cent to 34,113.23 and S&P 500 added 0.27 per cent to 4,192.66, while Nasdaq was nudged 0.48 per cent lower to 13,895.12 following a lag in mega-cap tech stocks with Amazon.com Inc, Facebook Inc., Microsoft Corp., Alphabet Inc.

alongside other growth stocks trading lower despite upbeat quarterly earnings’ reports. Meanwhile, referring to investors’ optimism over a broader reopening of US economy, a managing director of equity trading at Wedbush Securities, Michael James said, “All of those names that are having outsized gain today are as a result of economic reopening optimism, and people getting out of the house spending money on things.

While 87 per cent of more than a half of S&P 500-listed companies, which had posted quarterly earnings’ reports so far, had beaten Wall St. estimates, analysts are now expecting a 46 per cent growth in S&P 500 on a year-on-year basis, compared to a prior forecast of a growth of 24 per cent.

In the thick of other heavyweights, T-Mobile, Uber, Lyft, Pfizer and Peloton are scheduled to release quarterly earnings’ reports this week.