Technology stocks led a gap-down in the stock market Monday, although the energy sector rose as oil prices continued to rise.
Technology Select Sector SPDR (XLK) slid 1.3%, making it the worst performing S&P sector ETF this morning. The ETF is back below its 50-day moving average after regaining that level two sessions earlier. Health Care Select Sector SPDR (XLV) was down 0.8%.
The weakness in technology pressured the Nasdaq and S&P 500 today. The Nasdaq, which is about 50% techs, fell 0.6%.
But advancing stocks led decliners on the Nasdaq by a 9-7 ratio and by 12-to-7 on the NYSE.
The S&P 500 shaved its loss to 0.1%, a smaller loss thanks to strength in energy, financials and transportation stocks. Energy Select Sector SPDR (XLE) surged 3.6% to extend its rally. The price of U.S. crude oil rose more than 2% to $75.68 a barrel.
Energy Stocks Break Out
U.S. Stock Market Today Overview
Last Update: 10:28 AM ET 9/27/2021
The Dow Jones Industrial Average held up much better, rising 0.7%. JPMorgan Chase (JPM) rose more than 2% and broke out of a cup with handle base. Shares are in buy range of the 163.93 buy point. American Express (AXP), another Dow financial, is closing in on a 179.77 buy point.
After tip-toeing around a 338.65 buy point, Home Depot (HD) made a firmer move above that level with a 1.6% gain in heavy trading. McDonald’s (MCD) is still trying to break out past a 247.15 buy point.
Small Caps Outperform Stock Market
The Russell 2000 also broke away from the pack. The small-cap benchmark erased early losses and was up 1.2%.
Volume was higher on the NYSE and Nasdaq compared with the same time on Friday.
Bond yields extended last week’s gains, which put pressure on rate-sensitive tech stocks and other equities. The yield on the 10-year Treasury note was up 4 basis points to 1.49%. The 30-year Treasury bond climbed above the psychologically important 2% level.
Treasury yields have been rising since last week, when the Federal Open Market Committee indicated it could start unwinding its asset purchases as early as November. The Fed said the economy has recovered enough from the pandemic-driven economic troubles to justify less stimulus. The Fed also suggested it could raise interest rates in 2022, earlier than expected.
Techs Hurt IBD 50 Index
But Atkore (ATKR) is rising past a 98.10 buy point in nearly double its average volume. The building products supplier’s breakout comes as the relative strength line also makes a new high — a bullish sign.
Orders for durable goods rose 1.8% in August, above economists’ forecasts. Core orders, which exclude aircraft and military items, rose 0.5%. Core shipments climbed 0.7%, both above forecasts.
“After plummeting at the onset of the pandemic, orders have since sprinted and now sit at the highest since July 2014,” said Priscilla Thiagamoorthy, an economist at BMO Capital Markets. “The nice pickup came mostly on the back of commercial aircraft bookings, lifting overall transportation equipment up 5.5%, even as motor vehicle and parts halted a three-month winning streak.”
Juan Carlos Arancibia is the Markets Editor of IBD and oversees our market coverage. Follow him at @IBD_jarancibia
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