Whew, that was better. The S&P 500 Index (SNPINDEX:^GSPC) bounced back bigly on Sept. 9, gaining 67 points, or 2%. The turn back higher breaks a three-day skid that saw tech stocks -- and almost everything else -- edge lower by almost 7% from last Thursday through yesterday.
Just as yesterday's sell-off was broad across every sector, today's move up was widespread. More than 400 of the 505 stocks in the S&P gained today, with the majority of stocks in every sector finishing the day in positive territory. This included the energy sector, which bounced back a little bit today after yesterday's massive sell-off.
Leading the way were the "FAAMG" stocks (Microsoft (NASDAQ:MSFT) was up, while Netflix (NASDAQ:NFLX) was a surprising loser today), with Apple (NASDAQ:AAPL), Amazon.com (NASDAQ:AMZN), and Microsoft up close to 4% or more, with their market cap heft more than offsetting the losses by airline stocks and cruise stocks. American Airlines (NASDAQ:AAL) and Carnival (NYSE:CCL) brought up the rear in those sectors.
Stocks are back, but so is volatility
Today's big gains for the S&P surely were cause for a sigh of relief for many investors. However, it's notable that today's gains weren't driven by any big economic news, a deal by congress on an economic aid package for the millions struggling under the coronavirus recession, or any other positive event.
It was, simply put, buyers leading the way, and in a pretty aggressive manner for a no-news day. The biggest takeaway here is that, while a good day is, well, good, it's a continuation of high volatility that had softened over the summer months.
In other words, investors may want to buckle in for a bumpy ride in the weeks ahead. If stocks are back to moving 2% on a no-news day, the mere hint of a whisper of real news could have a big impact on what investors do in the short term.
Tech stocks turning back positive but still have ground to make up
Today was a big move in the "right" direction for the tech giants. Every S&P 500 tech stock with a market cap of $80 billion or more gained value today. In addition to those listed above, that includes giants NVIDIA, up 6.7%, and salesforce.com (NYSE:CRM), up 4%.
But by that same measure, they're all still down over the past five days, and many by double-digits. Apple shares are still off 16%, while Microsoft shares are down the least, off "only" 10.8% from the prior high last week.
Will investors be willing to push technology stocks back past their record levels, or will the volatility turn back down in the days ahead remains to be seen; despite their positive results, many tech stocks are still stretched, with their share prices gains a product of higher valuations, not better financial performance. What we do know is that, for the most part, technology companies have delivered big returns in 2020 because they're the companies underpinning much about the economy that's still working, or providing services and products to the people who are still working.
Tiffany lawyers up after buyout deal falls apart
The dubious title of biggest S&P loser today goes to Tiffany (NYSE:TIF), with shares down 6.4% following word that LVMH is walking away from the negotiating table to buy the luxury retailer.
In response, Tiffany has filed suit against the French luxury brand owner, with Chairman Roger Farah saying they believed that LVMH "will seek to use any available means" to avoid closing the deal on terms it had agreed to previously.
Tiffany is having a tough year, with sales down sharply due to the coronavirus pandemic's impact on in-person retail and the global economy.
Airlines losing altitude, cruise stocks sinking
While tech stocks have spent much of the past week moving lower before today's bounce back, Airline and cruise stocks have been moving in the opposite direction. In addition to American and Carnival's sell-off today, United Airlines (NASDAQ:UAL), Norwegian Cruise Lines, and Southwest Airlines fell more than 3% today, while Delta Air Lines, Alaska Air, and Royal Caribbean shares lost 2% or more.
Over the past five trading days, the group is still up, led by Carnival's 11% in gains. The positive gains over the past week are a product of the same thing that sent their shares falling today: Expectations for a post-COVID travel world.
Today's decline came after news broke late yesterday that AstraZeneca was pausing the phase 3 clinical trial of its COVID-19 vaccine, after a patient suffered a possible adverse reaction. Airlines executives at several airlines also lowered expectations recently, setting the bar for a recovery very low, and expecting it would be choppy going forward.
This marks a stark reversal in attitude for investors, who've grown hopeful over the past month that a combination of better treatments, faster, cheaper tests, and a vaccine more quickly than expected would open up the seas and the skies sooner rather than later. Today's news threw a little cold water on those expectations. It's going to take a lot more progress before the cruise operators can return to any semblance of business as usual.