The following is an excerpt from Ben Levisohn | December 2, 2016 | Barrons.com |
The S&P 500 and Nasdaq tumbled this week as investors dumped tech stocks and investors looked ahead to the Italian referendum on Sunday.
The S&P 500 fell 1% this week after finishing little changed at 2,191.95 today, while the Dow Jones Industrial Average ticked up 0.1% this week after dipping 21.51 points, or 0.1%, to 19,170.42. The Nasdaq Composite dropped 2.7% this week after rising 0.1% to 5,255.65 today.
Wellington Shields’ Frank Gretz looks back at the tech wreckage:
The FANG stocks never really got going, so weakness there, while not good, is not new. What is new is weakness in the Semiconductors, and, on Thursday, the weakness was a bit severe. We confess to not really understanding how Tech could go so wrong, but there it is. Though not very scientific, we don’t remember markets going very far without Tech at least participating. Though the move has been impressive, we don’t think Oil stocks are going to do it, and the last time they tried was the summer of 2008. Financials have been the real drivers and they’re having a leg up on the back of that Treasury appointment. Another area with a lot going for it in the Trump world are the Transports, all of them. The Dow Transports are at a new high, confirming the highs in the Industrials. If only the Dow Theory still worked. The truth is just about everything in the Transportation sector looks good chart-wise. And there’s General Motors (GM) – go figure…
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