Those beginning to worry about the renewed chip stock rout may find comfort in the fact that the broader markets are holding up very well.
The Dow Jones Industrial Average (^DJI) is still trading near record highs and above all key moving averages, per Yahoo Finance AlphaSpace data. The S&P 500 (^GSPC) is holding above its 100-day and 200-day moving averages, but late last week it slipped below the 50-day.
A few factors are preventing the chip stock pullback from harming the broader market, according to Charles Schwab strategist Kevin Gordon. However, investors should be on the lookout for whether these trends reverse.
'You've got essentially two-thirds of S&P 500 companies that are trading above their 200-day moving average. That's relatively healthy and still consistent with the market that is more rotational in nature and not necessarily one that is correctional," Gordon said on Yahoo Finance's Opening Bid.
The equal-weighted index and cyclical stocks have all signaled a strong economy, he explained. "And when you do look at the reaction of the market to some of these earnings beats, most of the pressure and most of the underperformance has been concentrated in the tech sector. Outside of that, when you look at financials or industrials or consumer discretionary, the reaction in the market has actually been positive."
#holding
The Dow Jones Industrial Average (^DJI) is still trading near record highs and above all key moving averages, per Yahoo Finance AlphaSpace data. The S&P 500 (^GSPC) is holding above its 100-day and 200-day moving averages, but late last week it slipped below the 50-day.
A few factors are preventing the chip stock pullback from harming the broader market, according to Charles Schwab strategist Kevin Gordon. However, investors should be on the lookout for whether these trends reverse.
'You've got essentially two-thirds of S&P 500 companies that are trading above their 200-day moving average. That's relatively healthy and still consistent with the market that is more rotational in nature and not necessarily one that is correctional," Gordon said on Yahoo Finance's Opening Bid.
The equal-weighted index and cyclical stocks have all signaled a strong economy, he explained. "And when you do look at the reaction of the market to some of these earnings beats, most of the pressure and most of the underperformance has been concentrated in the tech sector. Outside of that, when you look at financials or industrials or consumer discretionary, the reaction in the market has actually been positive."
#holding
2 months ago
