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LIVE MARKETS-Chip stock outperformance may bode well for Nasdaq

Tue 6th April, 2021 5:04pm
* S&P 500, Nasdaq rise, Dow slips * Cons staples leads S&P sector gainers; real estate biggest loser * STOXX 600 up ~0.7% * Dollar dips; gold, crude rise; U.S. 10-Yr Treasury yield ~1.67% April 6 - Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at CHIP STOCK OUTPERFORMANCE MAY BODE WELL FOR NASDAQ (1140 EDT/1540 GMT) The Philadelphia SE Semiconductor index .SOX has been strong so far in 2021. In fact, the SOX/Nasdaq Composite .IXIC ratio ended Monday at its highest level in more than 15 years. This trend of outperformance by this key sub-sector within tech .SPLRCT , may be a positive sign for the Composite: Indeed, with its 18% year-to-date rise, the SOX is handily outperforming both the S&P 500 tech sector and the Nasdaq. These indexes are up around 6%-7% in 2021. This action has the SOX on pace for a third straight year of superior gains vs both of them. In any event, of note, just looking back to early 2018, multi-week/mult-month periods of SOX/IXIC ratio divergence, preceded a number of significant periods of instability in the Composite. Most recently, in mid-February, as the IXIC was making new highs, the SOX/IXIC ratio failed to surpass its January peak. The Composite then declined more than 10% into its early March low. Although, the IXIC has yet to make a new high, the ratio's push to fresh highs may bode well for the time being. That is, as long as the ratio does not fall back below its early 2021 highs. Meanwhile, since peaking in early 2015, the SOX chip-maker/equipment-maker ratio has been in a choppy multi-year downtrend: More recently, amid news of a global semiconductor shortage*:nL1N2LV06Z, the SOX chip-maker/equipment-maker ratio topped in late-October of last year, and has since fallen to new lows.*:nL8N2LU0YG (Terence Gabriel) ***** S&P 500 EDGES UP EARLY; ENERGY REBOUNDS (1010 EDT/1410 GMT) Major U.S. stock indexes are near unchanged overall early Tuesday, but the S&P 500 .SPX is edging slightly higher and hit a fresh record high. The energy sector .SPNY is leading percentage gains among sectors, rising more than 1.6% after falling sharply on Monday. The utilities sector .SPLRCU is taking the biggest hit. The S&P 500 has been hitting records amid hopes for the economic recovery, with Friday's monthly U.S. jobs data among the latest bits of upbeat data to give investors more hope. Here is the early U.S. market snapshot: (Caroline Valetkevitch) ***** NYSE COMPOSITE: PRECARIOUS PERCH? (0900 EDT/1300 GMT) The NYSE Composite .NYA , an index of all common stocks on the NYSE, including ADRs, REITS, tracking stocks and foreign listings, posted a record high close on Monday. That said, a measure of the NYSE's internal strength is on a less stately perch: Indeed, since peaking in late December at 94.5%, the NYSE New High/New Low index (NH/NL) .AD.N has been diverging from the NYA. In fact, last Wednesday, this measure fell to a 5-month low of 68.1%. On the plus-side, the NH/NL index has since hooked up to 70.1%, suggesting potential for a reprieve. As stands, however, it remains shy of its descending 10-day moving average, as well as its late 2020, early 2021 highs. Of note, just since early last year, five NYA declines of around 4%-8% and one major decline of nearly 40%, were all preceded by a multi-week divergence in this measure. Admittedly, in the event of further NYA gains, there is room for the NH/NL index to push up toward its mid-March high at 90.4%, as well as the resistance line from the late-December peak, now just over 91%. However, failing to overwhelm these levels would keep the divergence intact.*:nL1N2LY0JP A renewed downturn, that violates the 68.1% March 31 trough, may coincide with NYA instability. (Terence Gabriel) ***** FOR TUESDAY'S LIVE MARKETS' POSTS PRIOR TO 0900 EDT/1300 GMT - CLICK HERE:*:nL1N2LZ0QU <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ NYA04062021 Early US market snapshot SOXIXIC04062021 SOX04062021 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Terence Gabriel is a Reuters market analyst. The views expressed are his own)
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