Market Recap: Wednesday, August 12

The markets closed green with the S&P 500 just shy of a record high, and the technology and utility sectors outperforming. The Final Round panel discusses the latest.

Video Transcript

SEANA SMITH: Welcome back to The Final Round here on Yahoo Finance. I'm Seana Smith. We are less than a minute from the closing bell. And it's going to be one to watch, as we have the S&P right around its record closing high. That number to watch will be 3386. As it stands right now, we are just below that level, just up-- it's still up 1, and nearly 1.5% on the day. Dow and NASDAQ also in green.

[BELL RINGING]

[GAVEL BANGING]

And that does it for the trading day today. Again, all three of the major averages closing in the green. The Dow up just around 1%, being led by some of the big tech names in there. Microsoft and Apple, the outperformers in the Dow today. The S&P closing up just around 1.4% and looks just shy of that record high. And the NASDAQ up just around 2% today.

The FAANG names here recouping some of their losses that they saw yesterday. Facebook, Amazon, and Netflix, all three of those stocks up more than 1.5%. We're also seeing gains here from Apple as well today.

Taking a look at some of the sector action, I think that's interesting and definitely worth noting the fact that we're seeing the cyclical and defensive sectors leading the way today. Technology is an outperformer, along with utilities, those two names really the outperformers for most of the trading day today. Financials taking a bit of a breather, the only sector in the red.

If you go back, though, and look at the performance over the past week, I think it's definitely worth noting that some of those cyclical sectors have been in favor and still remain in favor today, with the exception of financials. But industrials here amongst the top performers.

I want to bring in my co-host for the next hour, Myles Udland. And Myles, it's interesting, when you look at today's action, I thought we were going to get that record closing high on the S&P, but closing just shy of that level. But the Dow and S&P and NASDAQ, all three of the major averages, holding onto pretty solid gains today.

MYLES UDLAND: Yeah. Today, two days from now, a week from now. We've been on this for quite some time here on this program, THAT the market was going to make a record close. And when it does, great, that's fine. But I think knowing that we've been headed this way for some time, of course, is the more important point.

And you know, you highlight the sectors that outperformed today. And I think it's interesting, we talked about this a little bit with Jim Bianco during yesterday's show. I asked him, like, is tech a defensive trade? Is it fair to call the NASDAQ a defensive play? And on a day when you see some of the cyclicals take a breather after a huge run, and its utilities, XLU, and technology, XLK, leading S&P sectors higher. I think it's safe to say that technology is a safety trade.

And I don't know if that persists forever. I mean, there's certain, you know, certain automatic strategies around utilities, real estate, Treasuries, gold, for a safety kind of, your conventional defensive mix. But I think that-- I think it is worth probably thinking about and perhaps accepting the idea that tech is part of a risk off-ish type move in this market.

And I think the way that stocks behaved today, where all boats were higher, right, the tide lifted all boats today, really with the exception of financials, which is sort of yet another punishment for folks that are bullish on financial stocks. But I think it is just interesting to see the NASDAQ and utilities kind of trade together to the upside on a day when it seemed like we were doing just an inverse of that really hot trend we've seen just in the last couple sessions.

SEANA SMITH: Yeah. And for more on that trend, I want to bring in Jared Blikre.

And Jared, I mean, what do you make of the current levels that we're at right now? I know you were closely watching the S&P into the close, though not exactly breaking above that record closing high. But it's interesting, when you take a look at some of the trends that we've been seeing over the past week, what Myles was just talking about, and really technology becoming this safety trade at this point.

JARED BILKRE: Yes. And it really has. And growth in general is a safety trade, especially with depressed interest rates. Gets back to the Tina principle. There is no alternative when you look at the depressed bond rates that we've had. Worth noting that bond rates have shot higher over the last week. So maybe a trend that's reversing, along with the dollar. But too early to make that connection just yet.

So let's take a look at the S&P 500 price action, the levels I'm watching to the upside. Well, those record, those record closes and record levels just a little bit above. But to the downside, we have pretty strong support at 3,300. That would be in here, as well as even lower. I won't bother getting into all the levels. I'm sure we'll shake out sometime and have another 5% correction.

But a lot of people are looking to the next target, which is 33-- excuse me, 3,400 to 3,410 to the upside. And then beyond that, we have a really long-term trend channel. In fact, we can take a look at a 15-year chart. It's going to be hard to draw in here. But basically, this upper end, when we have this broadening megaphone pattern to the upside is about 3,600. So in the next few months, maybe next year, 3,600 is the target. To the downside, we have this lower end here. So we could get a shakeout, but not really any signs of that just yet.