The tech sector rallied while other stocks took a dip.
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It was another day of ups and downs.
A tepid rally in the stock market after yesterday’s more than 2-percent drop petered out this afternoon. The S&P 500 index closed up 0.01 percent, just off its low for the year yesterday. The Dow and Nasdaq composite indexes closed up 0.35 percent and 0.45 percent respectively.
The Entrepreneur index was up 0.63 percent led by the technology sector.
Oil and gas producer Hess Corp. had the biggest decline on the index today, falling 4.92 percent. Things were looking up for Hess two months ago. With the price of oil up above $ 70/barrel, and the company levered to growing production in shale fields across the U.S., the future looked bright.
But things change quickly in the oil industry. The combination of record crude production in the U.S. and Russia, and a dip in global growth expectations has knocked the chair out from under the price of oil. Down nearly eight percent today, it has now fallen more than 40 percent in the last ten weeks, and analysts believe it may fall further.
As in 2015-16, when the price of oil fell into the 30s, the industry could be headed for another shakeout if the plunge continues. Hess Corp., one of the larger, better capitalized producers in the country, is nevertheless feeling the pain. The stock is down 36 percent since early October, and is now down 0.34 percent for the year.
The tech sector led the rally this morning as the FANG stocks were all up smartly. The buying tapered off somewhat in the afternoon, but Alphabet Inc. and Amazon.com were up 1.2 percent and 2.01 percent respectively while Facebook rose 2.48 percent. Netflix was up 3.1 percent — the biggest gain on the Entrepreneur index today. The rest of the tech sector was generally up with NVIDIA Corp (2.34 percent) and Adobe Systems Inc. (2.17 percent) posting some of the larger gains.
The clothing makers’ stocks continue to seesaw. Down more than 3 percent yesterday, Under Armour Inc. was up 2.23 percent today. Ralph Lauren(1.51 percent) was also up but L Brands closed down 1.69 percent. Tesla was down again today. The global head of sales Dan Kim, who had only joined the company in January, left Tesla to work for Airbnb. The company did not announce the departure. Dozens of senior executives have left the company in the last two years. Tesla was down 3.27 percent today and is off more than 10 percent in the last three trading sessions.
High growth drug-makers Alexion Pharmaceuticals and Regeneron Pharmaceuticals were down 3.23 percent and 1.73 percent respectively. Other notable gains on the day were posted by Fedex Corp, up 1.55 percent, and homebuilder D.R. Horton Inc. up 2.1 percent. Both economy-sensitive stocks have been under pressure lately. Fedex will report earnings after the market closes.
Investors will be awaiting news from the Fed meeting tomorrow. The bond market is fairly daring central bankers to raise rates another quarter point. Long and short-term rates were down sharply again today; they have plummeted in the last month as signs of a global economic slowdown accumulate, and volatility picks up in financial markets. The futures markets still put the odds of a rate hike tomorrow at 70 percent, but the Fed is expected to sound a more dovish tone on rate hikes for next year.
The Entrepreneur Index™ collects the top 60 publicly traded companies founded and run by entrepreneurs. The entrepreneurial spirit is a valuable asset for any business, and this index recognizes its importance, no matter how much a company has grown. These inspirational businesses can be tracked in real time on Entrepreneur.com.