Peaks and Valleys Define Volatile Week on Wall Street

Upbeat vaccine news initially boosted investor sentiment this week

Digital Content Manager
Mar 5, 2021 at 3:20 PM
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The first week of March was a volatile one, with vaccine news, profit-taking and rising bond yields causing commotion up and down Wall Street. Everything kicked off Monday on a tremendously upbeat note, after Johnson & Johnson's (JNJ) Covid-19 vaccine received emergency use authorization from the Food and Drug Administration (FDA). Big Tech also showed signs of recovery, helping the three major benchmarks notch their best wins in months. Much of that optimism had faded by Tuesday, though, as profit-taking gripped the market, even amid a retreating 10-year Treasury yield.

The indexes extended their losses Wednesday, after rebounding bond yields took a hit on Big Tech, which relies on easy borrowing for rapid growth. It was a particularly tough session for the S&P 500, with the benchmark logging its fourth loss in five days. Federal Reserve Chair Jerome Powell threw investors into a panic on Thursday, after noting the central bank must be "patient" before changing policy in response to higher inflation. In turn, the tech-heavy Nasdaq breached its year-to-date breakeven point, while the Cboe Volatility Index (VIX) -- Wall Street's feat gauge -- touched its highest level since Feb. 1. At last check, all three major benchmarks were staring at weekly losses, despite bouncing back on Friday thanks to positive nonfarm payrolls data.

Growth Stocks Take the Spotlight

A handful of growth stocks made headlines this week. PlugPower (PLUG) rallied on Monday after J. P. Morgan Securities called it "attractively priced," with several "long-term growth opportunities." Meanwhile, electric vehicle concern Nio (NIO) pulled back ahead of its fourth-quarter earnings report, though the options pits remained red-hot. Semiconductor name Advanced Micro Devices (AMD) has suffered during the recent tech slide, but the good news is the stock has moved closer to a historically bullish trendline. Pandemic darling Zoom (ZM) climbed up the charts this week, too, aided in part by a slew of post-earnings bull notes.

Tech Sector Stays Busy Despite Rising Bond Yields

Amid rising bond yield concerns, many household names in the tech sector were in focus. On Monday, e-dating stalwart Match Group (MTCH) flashed a bull signal that may indicate more record highs for the security going forward. Streaming staple Roku (ROKU) took a breather after announcing plans to acquire Nielsen's (NLSN) Advanced Video Advertising business. Ridesharing giant Lyft (LYFT) soared, however, after it reported its best week of riding volume since the pandemic started. Amazon.com (AMZN) found the spotlight per usual, following reports that the company was close to a media rights deal with the National Football League (NFL).

Packed Earnings Week Draws Mixed Results

Several major names stepped into the earnings confessional over the last few days. Target (TGT) reported better-than-expected fourth-quarter earnings on Monday, but the stock fell nonetheless. Hewlett Packard Enterprise (HPE) moved higher, on the other hand, beating Wall Street's earnings and revenues estimates, and attracting six price-target hikes. The same was not true for fast food name Wendy's (WEN), with the chain suffering a dizzying drop on Wednesday after an earnings and revenue miss. Costco (COST) had a similar fate, collecting at least 11 price-target cuts on Friday due to dismal second-quarter profits.

 

All Eyes on the Federal Budget Update, Inflation Data

The earnings season will wind down next week, but some major names such as AMC Entertainment (AMC) and Ulta Beauty (ULTA) are still set to report. Plus, there will be plenty of economic data to keep investors busy. Most notably, jobs inflation data is due out, in addition to the Federal Budget Balance. Until then, you can put the overnight indicator to the test, and dive deeper into what Wall Street's fear gauge might be trying to tell us.

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