U.S. Stocks Mixed as Energy Shares Gain
Investors ditched technology stocks and scooped up shares of financial companies Thursday, highlighting the diverging
fortunes of the two sectors since the U.S. election.
Tech stocks in the S&P 500 have lost 2.7% since Nov. 8, including a 2.3% fall Thursday, while financial companies have
gained 14%. The groups had been rallying together when investors returned to riskier assets in the months following the
U.K.'s vote to leave the European Union.
The surge in financials is responsible for more than half of the S&P 500's gains since Nov. 8, even before Thursday's
1.7% rise, according to S&P Dow Jones Indices.
But those bets—and related trades that have sent dividend-paying stocks tumbling and the U.S. dollar
soaring—rely on assumptions about what policy will be enacted, some analysts said.
"It's not clear if those expectations are going to be fulfilled," said David Lefkowitz, senior equity strategist at
UBS Wealth Management Americas. "It really hinges on the success of some of these reflationary policies."
The rotation into financials has come in tandem with declines in tech companies. The tech sector was up 11% in 2016
ahead of the election, as investors and analysts predicted they would be winners in a slowly growing economy. Since
then, the sector has been buffeted in part by concerns about the potential for stricter trade and immigration policies
under a Trump administration, along with worries about slowing computer and smartphone sales, some analysts said.
Semiconductor companies were some of the biggest decliners Thursday. Dan Morgan, senior portfolio manager at Synovus
Trust, said the selling was spurred by data showing reductions in shipments of personal computers and a report that
Apple was reducing orders on its iPhone 7, hitting suppliers.
The Dow Jones Industrial Average rose 68 points, or 0.4%, to 19192, after posting in November its biggest monthly gain
since March. The S&P 500 slipped 0.4%, and the tech-heavy Nasdaq Composite fell 1.4%.
Investors sold real-estate, utilities and consumer-staples shares, often considered proxies for bonds because of their
dividends. The yield on the 10-year Treasury note climbed to 2.444%—its highest closing level since June
2015—from 2.365% Wednesday. Yields rise as prices fall.
Earlier, European stocks slipped, with the Stoxx Europe 600 falling 0.3%. European shares lagged behind a rally in
U.S. stocks last month as investors have remained cautious ahead of Italy's constitutional referendum Sunday—the
first of a series of important votes in Europe in the coming months.
Asian shares gained overnight on the back of Wednesday's surge in crude-oil prices. Australia's S&P ASX 200 closed up
1.1%, while Japans's Nikkei Stock Average also rose 1.1%, to close at its highest level of the year.
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