The Dow rose more than 600 points, or 2%, on Monday as investors applauded the Senate for a Covid-19 relief package that seeks to bolster the U.S. economy. The S&P 500, Wall Street’s broadest benchmark, also rose 0.8%.
But a sell-off in technology stocks continued Monday, pushing the Nasdaq down 0.8%. In reality, appeal (AAPL), Microsoft (MSFT) and Sales team (CRM) were the only Dow shares that were in the red.
And Tesla, 3% lower, was one of the big laggards in the S&P 500. Tesla (TSLA) has fallen by almost 18% so far this year.
Investors are apparently worried about what will happen to large technologies and other growth stocks in an environment when inflationary pressures increase and bond yields are higher.
Ten-year treasury yields rose to about 1.6% after Senate approved President Biden’s $ 1.9 billion stimulus proposal, paving the way for comprehensive legislation to be signed early this week .
An improving economy should be good news for investors – even if large technology stocks pull back.
Investors may be engaged in so-called sector rotation: they are flocking together to find new market leaders who can benefit from higher inflation and an improving economy, such as banks, consumer businesses and energy supplies.
Optimism about Covid-19 vaccines also gives Wall Street hope that consumers will soon be able to return to a more normal life and do things like go to the movies, go on holiday and go shopping again more freely.
In this line Disney (DIS), Coca-Cola (KO) and Home Depot (HD) was among the top Dow winners on Monday.