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Investors are apparently not interested in seeing another stock market correction, at least not this week. the S&P 500 Index (SNPINDEX: ^% GSPC) gained 51.9 points, or 1.6%, on September 25. Today’s bullish move is pushing the index, which is broadly representative of the US stock market, slightly out of correction territory. After Wednesday’s close, the S&P 500 had fallen 9.6% from its September 2 high, putting stocks on the brink of an official correction (the threshold of which is typically 10%).
Today’s gains were large, with more than 425 of the individual components of the index closing higher. Tech stocks and cruise lines in particular were the biggest winners. Apple (NASDAQ: AAPL) Y NVIDIA Corporation (NASDAQ: NVDA) Shares rose 3.8% and 4.3%, respectively, making them the best-performing companies of the mega-cap tech giants on a big day for the tech sector. Norwegian Cruise Line Participations (NASDAQ: NCLH), up to 13.7%, and Carnival (New York Stock Exchange: CCL), up 9.7%, rose more than the S&P 500 shares today after a bullish note from a Wall Street analyst.
On the downside, oil stocks continue to struggle. Apache (NASDAQ: APA) Y National Oilwell Varco (NYSE: NOV) they were the biggest S&P losers today, and most oil stocks ended lower.
Investors look for the next big winners. Image source: Getty Images.
Analyst: Maybe early, but cruise stock recovery is coming
By joining Norwegian and Carnival today, the shares of Royal Caribbean (NYSE: RCL) it closed almost 8%. This put all three near the top of the S&P in earnings today, following a note from a Barclays analyst who raised its price targets for all three. Analyst Felicia Hendrix believes the industry is approaching a “tipping point.” She hopes that the US Centers for Disease Control and Prevention will soon provide a light at the end of the tunnel by updating the “no sail” order that prohibits cruise ships from operating in US waters.
All three stocks have gained sharply from the bottom in late March and early April. Still, over the past two weeks, they have given up some of those gains. Even with today’s momentum, all are still below September highs in double digits:
YCharts CCL Data
I hope Hendrix is right on two points. First, the cruise industry will eventually rebound. Second, it is probably too early to call this a sea change. I’m just not convinced the time has come to re-invest in cruise stocks. Anticipating the CDC update of the no-sail order could cost investors if the recovery takes as long as I hope, and I expect it to take much longer than Hendrix thinks.
Apple updates leading tech stocks higher again
The tech sector has fueled the three-week sell-off that nearly pushed the market into a correction. For example, Apple shares lost 20% at one point. The company is no longer a member of the $ 2 trillion market cap club.
But at least one analyst thinks it’s time for investors to start buying the king of mega-cap technology once again. In a note to investors issued Friday, Katy Huberty of Morgan stanley it reiterated its “overweight” rating on Apple shares and its $ 130 price target, which helped propel the shares nearly 4% on a big day for the entire industry.
the Select SPDR ETF technology (NEW: XLK), which tracks the tech components of the S&P 500, gained 2.4%, easily becoming the best-performing sector on the day. While mega-cap tech stocks did a lot of heavy lifting, they weren’t the only winners. Of the 72 stocks in the tech sector, 70 closed higher today. Just giant of memory Micron technology (NASDAQ: MU) Y Hewlett Packard Enterprise (New York Stock Exchange: HP) saw his shares fall.
Tech stocks are still 10% down from their September 2 high, and Apple shares are down more than 14%. Some observers say the sector is still overvalued.
YCharts AAPL Data
It is uncertain whether tech stocks will recover more or sell in the short term. Still, technology underpins much of the future of the global economy. The sector has crushed the market in the long run. These industry qualities are likely to hold true for years to come, if not weeks or months.
Oil stocks lag due to oversupply
Apache and National Oilwell weren’t the only oil stocks on today’s worst-performing list. Seven of the last 10 today were companies operating in the oil zone. While the Energy Select Sector SPDR ETF (NEW: XLE), which tracks oil and gas stocks in the S&P 500, ended very slightly today, most energy stocks closed lower. These actions include independent oil producers such as Apache and Occidental Petroleum (New York Stock Exchange: OXY), 4% less, together with equipment and service companies such as National Oilwell and Schlumberger LTD (NYSE: SLB), up to 4.2%.
Crude oil prices have taken another beating after petrostates like Saudi Arabia and Libya turned their attention to global markets. After being closed for much of 2020, Libya recently reopened its oil exports and could add up to 1 million barrels a day to an already oversupplied global market. Meanwhile, Saudi Arabia recently began discounting oil from US refineries for the first time since the coronavirus crisis hit oil demand this spring.
WTI Crude Oil Spot Price Data by YCharts
Oil producers and related companies, such as equipment manufacturers, face a painful and uncertain path. As long as global demand for oil remains below previous levels, US independent producers could be forced to wage an oil price war that they cannot win.
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