Dow Cuts Gains as Tech Turns Lower on Apple Worries

Investing.com – Wall Street eased from session highs on Friday as big tech eased from lows and cyclical sectors like financials and industrials climbed.

The Dow Jones Industrial Average rose 0.56% or 154 points, but had gained as much as 294 points at the highs of the day. The S&P 500 was up 0.08%, while the Nasdaq Composite slipped 0.70%.

The tech wreck that began earlier this week continued, led by weakness in the Fab 5. Facebook (NASDAQ:FB) Alphabet (NASDAQ:GOOGL) Amazon.com (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) trading in the red.

Apple came under added pressure after JPMorgan raised concerns about slowing sales ahead of the tech giant’s 5G-enabled iPhone slated to launch later this year.

There was “a moderation in momentum” for the lower-end iPhone SE  and a slow down in sales of the iPhone 11, JPMorgan (NYSE:JPM) analyst Samik Chatterjee said in a note, citing surveys from Wave7 Research. 

Adding to worries over Apple’s growth, the company on Friday revised its App Store guidelines that will likely directly affect game streaming services ahead of a new iPhone software release later this month.

With tech taking a breather, investors appeared to turn to cyclical stocks, which tend to outperform in a growing economy.

With stimulus from the Federal Reserve expected to continue for a prolonged period, some investors have been making the case that value stocks are ripe for the picking.

“Ultimately, if the Fed is dovish and monetary policy is easy, markets have a backstop. In other words, we must still buy the dip,” said Fundstrat Founder Tom Lee said in note Thursday.

Lee also backed “epicenter” stocks, or those impacted by the pandemic. These stocks “are going to be primary contributors to EPS growth in 2021, thus, we see better risk/reward.”

On the earnings front, Peloton Interactive (NASDAQ:PTON) fell more than 3% even as the company delivered better-than-expected

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