Dow Jones Stock Market Today – The Dow Rose 1 Point, but It Was a Great Day for Value Stocks

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Most stocks rose Friday as the economic outlook continues to brighten, but gave up gains ahead of the close.

The
DOW JONES GLO(BA)L/DJIA”>
Dow Jones Industrial Average

gained 0.98 points, essentially unchanged to close at 31,494.32, although it did touch an intraday record of 31,647.53. The

S&P 500

fell 7.26 points, or 0.19% to end at 3,906.71, and the

Nasdaq Composite

Index rose 9.11 points, or 0.07%, to close at 13,874.46. The biggest gainer in the S&P 500 was specialty-chemicals firm Albermarle (ticker: ALB), which saw shares surge 10.4%.

The reason the S&P 500’s advance couldn’t hold was largely because growth components struggled, with the

Vanguard S&P 500 Growth Index

Fund (VOOG) slumping 0.61%. Interest rates kept moving higher as they’ve jumped since last week. Higher rates erode the value of future profits—something that growth investors count on, as those companies expect to see profit growth or profitability come farther down the line than value firms.

But many stocks—especially the ones most sensitive to economic activity and reopenings—performed handsomely and for good reason.

Trusted Secretary of the Treasury Janet Yellen defended President Biden’s wish for a lofty $1.9 trillion fiscal spending package. More cash into household and small business accounts means more ability to spend and rehire as states continue reopening on the back of inoculations. As for those inoculations, the reopening process may speed up from here. A study showed that just one dose—not two—of Pfizer’s vaccine is 85% effective against the virus. “By the time the spring time comes along, the economy is going to be firing on all cylinders,” Ed Campbell, portfolio manager at QMA, told Barron’s.

Right on cue, the

Invesco S&P 500 Equal Weight ETF

(RSP), which weighs each holding in the index equally and reflects the breadth of stocks moving in one direction or the other, rose 0.76%. Stocks most tethered to the reopening exhibited drastic outperformance.
(AAL)“>
American Airlines Group

((AAL)) stock rose 5.5%, while shares of

Darden Restaurants

(DRI) and

MGM Resorts International

(MGM) rose 3% and 3.9%, respectively.

The most cyclical stocks, tangential beneficiaries of an open economy, also rose sharply. The

Energy Select Sector SPDR

Fund (XLE) rose 1.7%. The

SPDR S&P Bank ETF

(KBE) rose 2.9% as higher long-term interest rates mean greater profitability for lenders.

Growth stocks just can’t catch a break right now.

Write to Jacob Sonenshine at jacob.sonenshine@barrons.com