Market Update: Tech Sinks U.S. Stocks as Nasdaq Pulls Back from Record Levels

U.S. stocks diverged sharply Thursday, as technology shares dragged the Nasdaq from record levels while consumer sectors powered the Dow to three-month highs.

Stocks Mixed

The Nasdaq Composite Index declined for the first time in five sessions, falling 0.7% to 7,635.07. The pullback followed three consecutive record highs.

The broader S&P 500 Index fell 0.1% to 2,770.37, with losses mainly concentrated in four sectors. Information technology declined 1.1% following two weeks of solid gains. On the opposite side of the ledger, shares of energy companies jumped 1.5%.

Dow industrials gained for a second consecutive day, adding 0.4% to 25,241.41. The blue-chip index closed at its highest level since March 9.

Shares of McDonald’s Corp (MCD) rose more than 4% as analysts raised their outlook for U.S. same-store sales.

Oil giant Chevron Corp (CVX) also put up firm gains, climbing 2.9%.

The CBOE Volatility Index, also known as the VIX, rose more than 4% to 12.15. Wall Street’s preferred measure of investor anxiety was u0 double digits earlier in the day after falling Wednesday to its lowest level in more than four months.

Warren Buffett Bullish on the Economy

Berkshire Hathaway CEO Warren Buffett believes the U.S. economy is shifting into higher gear, which supports the case for holding on to equities.

Right now, there’s no question: It’s feeling strong. I mean, if we’re in the sixth inning, we have our sluggers coming to bat right now,” Buffett told CNBC in an interview.

The Atlanta Fed GDP tracker is calling for second-quarter growth of 4.5% according to the latest estimate released on Wednesday. The U.S. economy expanded just 2.2% annually in the March quarter, revised estimates showed last week.

Policymakers at the Federal Reserve are banking on faster growth and inflation to justify their current interest rate regime, which calls for at least two more hikes this year. The Federal Open Market Committee (FOMC) will in all likelihood vote to raise the benchmark interest rate next week.

Cryptocurrency Markets Steady

It was another quiet session for cryptocurrencies, as subdued trading volumes kept the market-makers in check.

Compared with 24 hours ago, the cryptocurrency market has gained around $8 billion to $346.1 billion, according to data from CoinMarketCap. Trading volumes averaged $15 billion over the same period.

Bitcoin hovered around $7,700 for much of the afternoon, though trend signals suggest that a major breakout could be afoot. After protecting the $7,000 bottom, investors are now looking at a potential rally north of $8,000.

The altcoin asset class gained roughly $5 billion on Thursday, with most major coins booking gains. Among the top-ten, EOS was the best performer, climbing more than 5% to $14.27. Ripple XRP gained 2.7% to trade at $0.681. Ethereum advanced 1.5% to reach $607.28.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Author:
Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi