Wall Street closed in an upbeat mood on Nov 19 as investors once again retreated to expand their holdings of major tech players amid the soaring coronavirus cases. The Dow Jones Industrial Average gained 0.2%. Meanwhile, the S&P 500 rose 0.4%, along with the Nasdaq Composite’s gain of 0.9%. Notably, it came out to be the first gain for the major averages in three sessions.
Netflix (NFLX) and Amazon (AMZN) rallied 0.6% and 0.4%, respectively on the same day. Alphabet (GOOGL) appreciated 1%, and Microsoft (MSFT) rose 0.6%. Apple (AAPL) was up 0.5% and Facebook (FB) closed with a 0.4% gain.
The coronavirus outbreak continues to worsen in the United States and globally. The number of cases has crossed 11.5 million in the world’s largest economy. According to a CNBC article, its analysis of the Johns Hopkins University data revealed that the seven-day average of daily new U.S. coronavirus infections now stands at 161,165, increasing 26% from the previous week.
The rising coronavirus cases will once again prompt Americans to send more time indoors and opt for in-house entertainment modes. We are also expecting to see surging work-from-home and online shopping trends, increasing digital payments, growing video streaming and soaring video game sales in the current period.
With the new trends making way, a few major technology stocks are expected to keep gaining traction from the buoyancy in demand for their products and services. Evidently, cloud computing has emerged as a key technology in the fight against COVID-19. It is backing organizations in remotely processing a lot of information, developing and running key applications and services, and helping employees across the world collaborate while working. The work-from-home model too has bumped up the sales of PCs, laptops and other kind of computer peripherals.
Also, an increasing number of people are now resorting to streaming platforms like Netflix, Amazon Prime or Disney+ or turning to social media platforms like Facebook and Twitter for in-house entertainment.
Highlighting the important role that technology is playing with respect to helping people maintain social-distancing norms, The NPD Group’s Future of Tech report projects technology sales to see a historic growth rate of 18% year over year in comparison to the year-ago period’s 4% rise in fourth-quarter 2020. Also, e-commerce is anticipated to represent more than 60% of technology sales during the same period.
Technology ETFs to Consider
Investors seeking to ride the big tech rally could consider the following ETFs:
Vanguard Information Technology ETF ( VGT Quick Quote VGT - Free Report)
The fund seeks to track the performance of the MSCI US Investable Market Information Technology 25/50 Index. It has an AUM of $38.31 billion. It charges investors 10 basis points (bps) in annual fees. The fund sports a Zacks ETF Rank #1 (Strong Buy), with a Medium-risk outlook (read:
Apple Beats Fiscal Q4, iPhone Sales Drop: ETFs in Focus). Technology Select Sector SPDR Fund ( XLK Quick Quote XLK - Free Report)
The fund seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the Technology Select Sector Index. It has an AUM of $36.45 billion. It charges investors 13 bps in annual fees. The fund presently flaunts a Zacks ETF Rank of 1, with a Medium-risk outlook (read:
ETF Areas to Win/Lose With Biden on the Verge of Victory). iShares U.S. Technology ETF ( IYW Quick Quote IYW - Free Report)
The fund seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the Dow Jones U.S. Technology Capped Index. It has an AUM of $6.38 billion. It charges investors 43 bps in annual fees as stated in the prospectus. The fund sports a Zacks #1 Ranked ETF, with a Medium-risk outlook (read:
ETFs to Buy as Cloud Boosts Microsoft's Fiscal Q1 Results). Fidelity MSCI Information Technology Index ETF ( FTEC Quick Quote FTEC - Free Report)
The fund seeks to provide investment returns that correspond, before fees and expenses, generally to the performance of the MSCI USA IMI Information Technology Index. It has an AUM of $4.81 billion. It charges investors 8 bps in annual fees. The fund also flaunts a Zacks ETF Rank #1, with a Medium-risk outlook.
iShares Expanded Tech-Software Sector ETF ( IGV Quick Quote IGV - Free Report)
This ETF provides exposure to software companies in the technology and communication services sectors by tracking the S&P North American Expanded Technology Software Index. The fund holds a basket of 100 securities. It is popular with an AUM of $5.65 billion. The product charges 46 bps in annual fees and sports a Zacks ETF Rank #1, with a High-risk outlook.
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