Tech Bounces Amid Flurry of News

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Tech bounced and stocks held a key level amid a flurry of big news last week.

S&P 500 was little changed but managed to make a higher low along its 200-day moving average for the third time since February’s big crash. More attention focused on the Nasdaq-100’s gain of almost 2 percent gain, fueled by a historic surge in Apple (AAPL).

The world’s most valuable company enjoyed a virtuous one-two punch of bullish news. First, earnings beat estimates on Tuesday night after iPhone sales held up better than feared. Then on Friday it became public that billionaire market guru Warren Buffett spent much of the last quarter amassing shares in the iconic tech giant. By the time all those facts were digested, AAPL rode its best week in seven years to a new all-time high.

It was the busiest stretch of the month for economic news. Most of numbers lagged estimates: non-farm payrolls, the Institute for Supply Management’s manufacturing index and pending home sales. That seemed to put a lid on spiking interest rates and the U.S. dollar — especially after the Federal Reserve issued an inconclusive policy statement. Will attention now shift back to commodities and metals?

Speaking of commodities, crude oil closed at its highest level since July 2015. Black gold is likely to be even more closely watched in coming sessions with traders expecting U.S. President Trump to restore sanctions against major producer Iran.

Semiconductor major Quorvo (QRVO) was the top performer in the S&P 500 last week, rallying 18 percent on strong results. Refinery operator Andeavor (ANDV) took the blue ribbon, up 14 percent after getting acquired by Marathon Petroleum (MPC). AAPL was up 13 percent, followed by a 10 percent bounce in supplier Skyworks Solutions (SWKS).

S&P 500 chart with key moving averages.

But most firms moving on quarterly numbers dropped. Engineering company Fluor (FLR) plunged 24 percent on a huge miss and guidance cut, while manufacturer Arconic (ARNC) fell 23 percent on similar news. Both of those helped keep industrials under pressure for a second straight week. Cardinal Health (CAH), Unum (UNM) and Molson Coors (TAP) rounded out the bottom five in the index.

Tech was the best major sector, led by semiconductors, videogame makers and electronic payments. Healthcare was the worst performer, and may face more pressure soon with the White House wanting to cut drug prices. Consumer staples kept sliding to a new two-year low as well.

Inflation is likely to be a major theme this week as the market tries to anticipate future Fed moves on interest rates. Traders will also watch geopolitics, with a decision on Iran due by Saturday and more trade squabbles between Washington and Beijing.

Today’s quiet but tomorrow brings some noteworthy tech earnings after the close: Match.com (MTCH), which had its biggest drop ever last week on potential competition from Facebook (FB), Electronic Arts (EA) and TripAdvisor (TRIP).

Wednesday features producer-price data and crude-oil inventories. Thursday’s big items are consumer price inflation, initial jobless claims and earnings from Nvidia (NVDA), the third-busiest stock for TradeStation customers last month. Consumer-sentiment concludes the week Friday morning.

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David Russell is VP of Content Strategy at TradeStation. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.