“When you’re at all-time highs and the market pulls back, the ones that tend to lead to the downside are often the high-beta stocks such as technology,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.
“When we have pauses or pull backs people tend to move out of growth stocks into more defensive names.” Copious stimulus measures, speedy vaccination drives and the Federal Reserve’s accommodative policy stance have spurred a strong rebound in the U.S. economy and pushed Wall Street to record highs this year. The so-called “pandemic winners”, however, have recently started to fall out of favor.U.S. and European stock markets also saw a sudden 0.5% drop in hefty volumes around 7:30 a.m. ET on Tuesday, leaving traders scratching their heads and one calling it a “micro flash crash”.
At 10:03 a.m. ET the Dow Jones Industrial Average was down 256.42 points, or 0.75%, at 33,856.81, the S&P 500 was down 45.00 points, or 1.07%, at 4,147.66, and the Nasdaq Composite was down 280.58 points, or 2.02%, at 13,614.54. Among other stocks, CVS Health Corp gained 2.8% on reporting a first-quarter profit above analysts’ estimates and raising its 2021 profit forecast.
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