Tech-Heavy NASDAQ Lags Dow Driven Rally

It has been a tug of war session, with the indices in and out of the green.  At midday, the Dow is up firmly, +300, meanwhile the Nasdaq is the laggard, down 1.04%.  Nothing earth shattering came from Fed Chairman Powell or Treasury Secretary Yellen’s second day of testimony.

News from Intel (INTC) about its comeback plan, with building two new “IDM 2.0” factories, helped the stock initially, but it has since dipped into the red.   The semiconductor index (SOXX), however, is up .35% on the day; but, not not all chips are up. 

Ten of the eleven S&P 500 are also positive despite the mega cap stocks being down.  The volatility or fear index, the VIX, is continuing to decline, and is trading at 19.35, down around 4.5%.  For now, the lone S&P 500 sector in the red is Communication Services.

Breadth is positive on the NYSE and negative on the Nasdaq, but there is more up volume than down on both.

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On the economic front, the final read for the HIS Markit Manufacturing PMI for March was 59, a two-month high, topping the 58.6 preliminary read.  The services PMI was also up, coming in at 60, from the 59.8 preliminary read.  New orders grew the fastest since June 2014, however issues with supply chain disruptions hampered output to the slowest level in 5 months.

• Composite Output Index at 59.1 (59.5 in February). 2-month low.
• U.S. Manufacturing Output Index at 54.5 (57.8 in February). 5-month low.

On the housing front, the weekly MBA Mortgage Applications Index declined 2.5%. The Refinance Index was 5% lower from the prior week, and 12% lower than prior year period.  The Purchase Index rose 3%.  The 30-year fixed rate is up .50% in 2021, and that, coupled with limited supply, pressured both refi’s and purchases.