U.S. markets and stock exchange traded funds were mixed Wednesday, with the S&P 500 and Dow Jones Industrial Average slipping from their record highs, on signs that the recovery in the labor market is slowing amid a spike in coronavirus cases.
On Wednesday, the Invesco QQQ Trust (NASDAQ: QQQ) rose 0.4%, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) was down 0.5%, and iShares Core S&P 500 ETF (NYSEArca: IVV) fell 0.2%.
“Technology is a defensive sector now, which is crazy,” Gene Goldman, chief investment officer at Cetera Investment Management, told the Wall Street Journal.
Dragging on the markets, the Labor Department revealed initial claims for state unemployment benefits last week rose to 778,000 from 748,000 in the prior week, Reuters reports.
“The question is who wins the battle – the vaccines or the rising cases in the short term,” Christopher Grisanti, chief equity strategist at MAI Capital Management, told Reuters. “For the last several weeks, the market has been looking through bad news, but then you get the statistic about the unemployment claim and the market focuses again on the short-term difficulties we are having.”
Meanwhile, technology stocks continued to maintain their strength, with mega-caps like Amazon and Apple taking charge, while more economically sensitive sectors like financials and energy retreated.
“Tech is here to stay,” Kenny Polcari, managing partner at Kace Capital Advisors, told Reuters. “What we are seeing is some shift within tech and that money is moving out of some of those highfliers and work-from-home stocks as the idea of the vaccine and the world coming back to normal settles in.”
U.S. markets have been gaining momentum in recent weeks as traders looked to three viable Covid-19 vaccines and a smooth transition in the White House.
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