Stocks Resume Pullback as Tech Comes Under Pressure Again

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It looks like yesterday's strong, tech-led session was just a one-day thing, as stocks returned on Wednesday with one of their worst performances of the past couple weeks.

Investors' sentiment toward tech changes from day to day after getting overheated during the epic coronavirus bounce back.

Sometimes they still love the spae... like yesterday when the NASDAQ rose 1.7%. But more recently, investors have been avoiding it... like today.  

On Wednesday, the NASDAQ dropped 3.02% (or about 330 points) to 10,632.99.

The FAANGs really got beaten up in the session. Each of the names moved sharply lower, especially Netflix (NFLX, -4.19%), Apple (-4.19%) and Amazon (AMZN, -4.13%).

The S&P dipped 2.37% to 3236.92. This index and the NASDAQ both broke 4-day losing streaks on Tuesday and looked like they may be able to go back-to-back this morning. But that didn't last long.

The Dow had been up well over 150 points early in the session. By the closing bell though, it had plunged by 1.92% (or approximately 525 points) to 26,763.13.

There wasn't much news on Wednesday, but there doesn't have to be for stocks to make some volatile moves right now. They're still trying to find a balance after five months of epic gains off the coronavirus lows.

And it doesn't help that Europe is putting on new restrictions amid rising cases, or that the next round of pandemic relief from Washington looks to be a no-go before the election.

On Thursday, Fed Chair Jerome Powell and Treasury Secretary Steven Mnuchin will be testifying in front of the Senate Banking Committee. If it's anything like their testimonies in the House on Tuesday, they'll be talking about the need for more help from Capitol Hill sooner rather than later.

Tomorrow also marks the jobless claims report, which has come under 1 million for three straight months now. Let's see if it continues.

Today's Portfolio Highlights:

Home Run Investor: The building products space has been very successful for this portfolio, so Brian decided to pick up a glass company on Wednesday. Apogee (APOG) is a leader in technologies for the design and development of value-added glass products, services and systems. The company beat the Zacks Consensus Estimate by 114% in its most recent report, while rising earnings estimates for fiscal 2021 and fiscal 2022 have made APOG a Zacks Rank #1 (Strong Buy). Speaking of the Zacks Rank, Chart Industries (GTLS) has slipped to a #4 (Sell). The editor sold the stock today and secured a nice 39% return in a little over two months. Read the complete commentary for more on the addition of APOG and the exit of GTLS.

Counterstrike: "A lot of what has been specualted by us is starting to become realized to investors and we are seeing some moderate selling in stocks. After some mild strength overnight, the New York open brought sellers, which didn't stop until the bell.

"This should really be expected considering the froth we saw over the summer combined with the uncertainty of the election and COVID-19. Those that piled into the FOMO trade in tech are now forced to unwind that trade. Leveraged retail is feeling the pressure as well, especially after their dream stock Tesla disappointed on battery day.

"Levered bulls are in trouble and the bears can smell it. Watch out for that 200-day flush if 3200 fails. We will be looking to buy over the next couple days, but its no time to be aggressive."
-- Jeremy Mullin

Until Tomorrow,
Jim Giaquinto

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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