Profit Taking May Contribute To Initial Pullback On Wall Street
March 04 2024 - 8:52AM
IH Market News
The major U.S. index futures are currently pointing to a
modestly lower open on Monday, with stocks likely to give back
ground after turning in a strong performance last week.
Traders may look to cash in on recent strength in the markets,
which lifted the Nasdaq and S&P 500 to new record closing highs
last Friday.
Overall trading activity may be somewhat subdued, however, as a
lack of major U.S. economic data may keep traders on the sidelines
ahead of several key events later this week.
Federal Reserve Chair Jerome Powell’s congressional testimony is
likely to be in focus, as investors on Wall Street analyze the
central bank chief’s comments for clues about the outlook for
interest rates.
Powell is due to testify before the House Financial Services
Committee on Wednesday and the Senate Banking Committee on
Thursday.
Later in the week, the spotlight will shift to the Labor
Department’s report on the employment situation in the month of
February.
The report, which is due to be released on Friday, is expected
to show employment jumped by 200,000 jobs in February after surging
by 353,000 jobs in January.
On Tuesday, the Institute for Supply Management is due to
release its report on service sector activity in the month of
February.
The ISM’s services PMI is expected to edge down to 53.0 in
February from 53.4 in January, although a reading above 50 would
still indicate growth.
Reports on factory orders, private sector employment, weekly
jobless claims and the U.S. trade deficit are also due to be
released this week along with the Fed’s Beige Book.
Stocks showed a strong move to the upside during trading on
Friday, adding to the gains posted in Thursday’s session. With the
extended upward move, the Nasdaq and S&P 500 once again reached
new record closing highs.
The tech-heavy Nasdaq jumped 183.02 points or 1.1 percent to
16,274.94 and the S&P 500 climbed 40.81 points or 0.8 percent
to 5,137.08. The narrower Dow posted a more modest gain, rising
90.99 points or 0.2 percent to 39,087.38.
For the week, the Nasdaq shot up by 1.7 percent and the S&P
500 advanced by 1.0 percent, but the Dow edged down by 0.1
percent.
The surge by the Nasdaq partly reflected substantial strength
among computer hardware stocks following upbeat results from Dell
(NYSE:DELL), with the NYSE Arca Computer Hardware Index soaring by
6.9 percent to a record closing high.
Shares of Dell skyrocketed by 31.6 percent after the computer
maker reported fourth quarter results that exceeded analyst
estimates on both the top and bottom lines.
The upbeat results from Dell also contributed to significant
strength among semiconductor stocks, as reflected by the 4.3
percent spike by the Philadelphia Semiconductor Index. The index
also reached a record closing high.
Biotechnology and networking stocks also saw considerable
strength, while gold, oil service and pharmaceutical stocks turned
in some of the best performances outside the tech sector.
The strength on Wall Street also came following the release of a
report from the Institute for Supply Management showing
manufacturing activity in the U.S. unexpectedly contracted at an
accelerated rate in the month of February.
The ISM said its manufacturing PMI dipped to 47.8 in February
from 49.1 in January, with a reading below 50 indicating
contraction. Economists had expected the index to inch up to
49.5.
The University of Michigan also released revised data showing
consumer sentiment in the U.S. unexpectedly deteriorated in the
month of February.
The report said the consumer sentiment index for February was
downwardly revised to 76.9 from the previously reported 79.6.
Economists had expected the reading to be unrevised.
With the unexpected downward revision, the consumer sentiment
index is now below the January reading of 79.0.
The data contributed to a downturn by treasury yields, which
added to optimism about the Federal Reserve eventually cutting
interest rates.
Dell Technologies (NYSE:DELL)
Historical Stock Chart
From Mar 2024 to Apr 2024
Dell Technologies (NYSE:DELL)
Historical Stock Chart
From Apr 2023 to Apr 2024