Buyers showed bold tenacity Monday, holding the broad averages steady until an extremely volatile Boeing righted itself. The stock, cherished above all others by its institutional sponsors, came under heavy pressure overnight on news that a 737 had gone down in Ethiopia, killing all 157 aboard. This was the second fatal crash of this aircraft in five months, and it triggered a stampede out of Boeing shares that carried into the early minutes of the regular session.
The selloff knocked the Dow for a loop, since Boeing, its most heavily weighted component, opened down 57 points. This helped put the Indoos 240 points in the hole from the get-go, in stark contrast to S&Ps that were up the equivalent of 150 Dow points. By day’s end this divergence had settled heavily in bulls’ favor: the Dow finished up 200 points; Boeing recovered 34 of the 57-points it had initially lost; and the S&Ps gained an impressive 40 points.
The Wall Street Journal pitched in with some ray-rah twaddle on the front page: Tech Stocks Bolster Global Markets. You could almost overlook that this is simply a narrowing of market leadership to an extreme, and that the geniuses who get paid to throw Other People’s Money at stocks are merely piling into fewer than a dozen high-profile, huge-cap issues. And not to sound churlish, but ‘tech stocks’ ain’t what they used to be. There was a time when this group might have included companies hard at work building things, producing energy from fusion, canceling gravity — that sort of thing. Instead, today’s list of tech-sector giants is led mainly by glorified advertising agencies and companies that sell stuff on the Internet: Facebook, Google, Tencent Holdings, Amazon, Alibaba and Naspers (a media biggie that is Africa’s largest publicly traded company). Get these stocks going, and investors and the news media could almost forget that the central banks are so fearful of a global recession that they are about to hit the QE panic button.