The Nasdaq index was set to open lower on Tuesday as investors continued to step out of megacap growth stocks and become companies that are expected to benefit from economic recovery.
Highly valued technology companies, including Microsoft Corp. (MSFT.O), Alphabet Inc (GOOGL.O), Apple Inc (AAPL.O), Amazon.com Inc (AMZN.O) and Facebook Inc (FB.O) have fallen between 0.6% and 1.7% in pre-market trade.
U.S. and European stock markets also saw a sudden drop of 0.5% in huge volumes around 7:30 a.m. ET on Tuesday, leaving traders scratching their heads and one calling it a “micro-flash crash.” Read more
The abundance of stimulus measures, rapid vaccination campaigns and the Federal Reserve’s adjustment policy caused a strong rebound in the US economy and pushed Wall Street to record highs this year. However, the so-called “pandemic winners” have recently begun to fall out of favor.
“Although megacap technology companies are a major part of the solid performance of portfolios throughout the pandemic, we believe that investors should be careful to avoid redistribution to this part of the market,” wrote Mark Hefele, chief investment officer at UBS Global Wealth Management. in the customer’s note.
“In an environment of accelerating growth, we continue to prefer cyclical and valuable sectors such as the financial and energy sectors.”
Planemaker Boeing Co (BA.N) rose 0.2%, while oil company Chevron Corp (CVX.N) rose 0.7%.
At 8:38 a.m. ET, the Dow electronic mines fell 136 points or 0.4 percent, the S&P 500 electronic mines fell 22.25 points or 0.53 percent, and the Nasdaq 100 electronic mines fell 113 points or 0.82%.
Among other stocks, Pfizer Inc (PFE.N) rose 1%, raising its annual sales forecast for the COVID-19 vaccine, which it developed jointly with Germany’s BioNTech SE. Read more
CVS Health Corp. (CVS.N) gained 1.7% in first-quarter earnings above analysts’ forecasts and an increase in its 2021 earnings forecast. Read more
Dupont (DD.N) jumped 0.5% higher after the industrial materials maker raised its full-year profit and revenue forecasts and beat first-quarter expectations. Read more
Earnings for the first quarter are largely optimistic. The average profit of the S&P 500 companies is expected to grow by 46% in the quarter, compared to forecasts for growth of 24% in early April, according to IBES from Refinitiv.
Investors also expected data for the week, including data from the Ministry of Labor’s non-agricultural payrolls, due to be released on Friday. The report is expected to increase the number of jobs added in April.
Our standards: Thomson Reuters’ principles of trust.