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Stock Market News for Feb 18, 2021

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The S&P 500 and the Nasdaq closed in the red on Wednesday weighed down by decline in big tech stocks as investors rotated out of growth stocks. However, the Dow booked its third straight record close after the Federal Reserve’s January meeting minutes signaled that it will not be removing monetary stimulus any time soon.

The Dow Jones Industrial Average (DJI) rose 90.27 points, 0.3%, to close at 31,613.02 and the S&P 500 lost 1.26 points, or 0.1%, to close at 3,931.33. The Nasdaq Composite Index closed at 13,965.49, declining 82 points, or 0.6%. The fear-gauge CBOE Volatility Index (VIX) increased 0.2%, to close at 21.50. Declining issues outnumbered advancing ones for 1.73-to-1 ratio on the NYSE and a 1.91-to-1 ratio on the Nasdaq favored decliners.

How Did the Benchmarks Perform?

The Dow was boosted by a 5.2%, .3% and 2% jump in shares of Verizon Communications Inc. (VZ - Free Report) , Chevron Corporation (CVX - Free Report) and The Home Depot, Inc. (HD - Free Report) , respectively on Wednesday. All three stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Decline in big tech weighed on the S&P 500 and the Nasdaq. Of the 11 major sectors of the broader sector, eight closed in the green and energy emerged as biggest gainer rising 1.5%. However, a 1% decline in technology sector accompanied with declines in industrial and materials sectors capped gains for the major index. Among the Nasdaq’s biggest decliners were, Baidu, Inc. (BIDU - Free Report) , Marvell Technology Group Ltd. (MRVL - Free Report) and Peloton Interactive, Inc. (PTON - Free Report) that closed at least 4.5% lower for the session.

Overall, the S&P 500 posted 13 new 52-week highs and no new lows, while the Nasdaq Composite recorded 92 new highs and six new lows.

FOMC Signals Monetary Stimulus to Stay

Benchmarks pared losses on Wednesday after the Federal Reserve released minutes from its January’s meeting. Federal Open Market Committee members reaffirmed that the central bank will be keeping policy loose well into the future, as officials believe that the economy is “far from” the central bank’s goals. The central banks will be holding benchmark short-term borrowing rates near zero and maintaining the minimum $120 billion of asset purchases each month, while the economy continue to shake off the effects of the coronavirus pandemic. The news pushed stocks to give up some of its day’s losses and helped the Dow hit a third consecutive record high close.

Retail Sales Jumps in January

Wednesday’s losses were capped as investors weighed improving economic data that indicates towards rising inflation expectations. The U.S. Census Bureau reported yesterday that retail and food services sales for January increased 5.3%, at $568.2 billion. It is a 7.4% jump from January 2020 and beats the consensus estimate of 1.1% and is much above the December’s revised decline of 1%. The $600 stimulus checks received last month helped consumers to spend freely.

Other Economic Data

Per a separate report released by the Federal Reserve, the U.S. industrial production rose 0.9% in January, a fourth straight monthly gain, surpassing the consensus estimate of 0.5%. However, the figures failed to beat December 2020’s revised gain of 1.3%. Output of motor vehicles fell 0.7% last month and the global shortage of semiconductors also weighed on output decline. Utility output also fell 1.2%, after a 4.9% rise in December.

Additionally, capacity utilization rate reflects the limits to operating the nation’s factories, mines and utilities rose to 75.6% in January. The figures came in higher than the revised 74.9% in the month before and surpassed the consensus estimate of 74.8%.

The U.S. Bureau of Labor Statistics also reported that the wholesale prices rose 1.3% in January, rebounding close to pre-pandemic levels. This indicated that inflation is rising modestly again as the economy recovers from the pandemic. The figures beat the consensus estimate of 0.4% gain and surpasses December’s rise of 0.3%.

Stocks that Made Headline

Antero Resources (AR - Free Report) Q4 Earnings Miss, Proved Reserves Fall

Antero Resources Corporation (AR - Free Report) reported fourth-quarter 2020 adjusted loss per share of 3 cents against the Zacks Consensus Estimate of earnings of 2 cents. The company’s year-ago loss was 2 cents per share. (Read More)

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