The 2.77% drop in the Nasdaq (QQQ) on Thursday, along with the S&P 500 (SPY) down by 1.39% set the market rally on pause. The Dow Jones, however, added 243.60 points to close at 41,198. The divergence between the former and the latter suggests a rotation.
This is not accurate.
The small-cap Russell 2000 ETF (IWM) fell by 1.05%, so market sellers did not move their investments. The Dow rose because UnitedHealth (UNH) gained 14.44% in the last week. Markets reacted positively to the firm’s quarterly earnings. It raised its full-year forecast from $1.15 - $1.35 a share to $1.90 - $2.05. The wide discrepancy in the forecast is a result of costs related to a cyberattack.
To minimize the impact of the cyberattack, UNH provided $9 billion in advance funding and rate-free loans to support care providers.
Goldman Sachs (GS), another big component of the Dow, gained nearly 5% in the last week. On July 15, the firm posted revenue growth of 16.9% Y/Y to $12.73 billion. It earned $8.62 a share (non-GAAP).
Most relevant in the tech sector is Intel (INTC) stock holding onto its gains. While AI-related chip stocks fell, INTC stock has a good chance of breaking out above $35.00. The firm is re-shoring its chip manufacturing to the U.S. Firms like AMD and Nvidia rely heavily on TSM’s plants.
