By
Bena Ilyas
May 13th, 2024
After the gains recorded last week, the stock market has changed the direction of its movement.
The United States stock market pared off gains accrued in the past week as tech stocks fueled a generally bearish outlook on Monday, the Dow Jones Industrial Average (INDEXDJX: .DJI) dropped 123.04 points following a 0.36% loss to 34,077.63. The S&P 500 Index (INDEXSP: .INX) slipped 0.53% to 4,163.26 while the tech-heavy Nasdaq Composite (INDEXNASDAQ: .IXIC) closed Monday’s session with a 0.98% loss to 13,914.77.
Tech Stocks and Their Affect on Dow Jones
Social media giant Facebook Inc (NASDAQ: FB), lost 1.29% to close at $302.24 while e-commerce firm Amazon.com Inc (NASDAQ: AMZN) slipped 0.81% to $3,372.01 per share. Amazon is not faring any better in the pre-market, shedding an additional 97 cents as the broader losses settle in.
Despite the losses, however, the American multinational beverage corporation Coca-Cola Co (NYSE: KO) ended the day with slight gains of 0.60% to $54.00. The uptick in share value was fueled by the better-than-expected first-quarter earnings results announced by the firm. The Atlanta-based company posted revenue of $9.02 billion versus $8.6 billion expectations during the past three months, citing the availability of vaccines and economic reopening as the basis for the growth.
“We are encouraged by improvements in our business, especially in markets where vaccine availability is increasing and economies are opening up, and we remain confident in our full-year guidance,” Coca-Cola CEO James Quincey said in a statement.
The positive performance of Coca-Cola was preceded by a similar impressive Q1 showing from bank stocks as reported last week. Overall, analysts see a good growth trajectory for the market as a whole with a continued earnings reports.
“We remain bullish on equity markets overall, and see continued strength in cyclical sectors that will benefit from a broad-based economic recovery that is underway,” said James Ragan, director of wealth management research at D.A. Davidson. “We look for very strong corporate results in Q1 2021 and Q2 2021, and believe that earnings estimates could be revised modestly higher.”
Bitcoin Plunge and the Infected Stocks
Bitcoin saw a flash crash over the weekend that also translated into a bearish drop on Monday. The world’s largest cryptocurrency by market capitalization is down 3.92% to $55,104.61 at the time of writing according to data from CoinMarketCap.
Wall Street firms with vested interests in Bitcoin saw a corresponding close on Monday. Electric vehicle maker, Tesla Inc (NASDAQ: TSLA) which invested $1.5 billion in BTC back in February dropped 3.40% to $714.63 while newly listed trading platform Coinbase Global Inc (NASDAQ: COIN) ended the day with a 2.63% loss to $333.00. The correlation between Bitcoin and these stocks was hard to miss and analysts have pointed this out.
“Whenever a headline grabbing asset sees a big decline at a time when the broad market stands at an expensive level, it usually has a negative impact on the stock market even if it’s only short-lived,” said Matt Maley, chief market strategist at Miller Tabak.
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