In this Nov. 5, 2020 file photo, a sign for Wall Street is carved in the side of a building, in New York. Stocks are opening broadly higher on Wall Street, Friday, May 21, 2021, bringing the S&P 500 out of the red for the week. (AP Photo/Mark Lennihan, File)
Stocks were broadly higher in morning trading Friday, giving the market enough momentum to be on pace to close the week higher after a volatile start to the week.
The S&P 500 index was up 0.4% as of 11:03 a.m. Eastern. The Dow Jones Industrial Average rose, 256 points, or 0.8%, to 34,340 and the Nasdaq was little changed. The S&P 500 was now up 0.1% for the week.
Banks and health care companies led the gains. Investors remain focused on the possibility of inflation as the economy stirs to life following more than a year of shutdowns related to the COVID-19 pandemic.
Inflation remains a worry for investors in part because it may cause central banks to pull back on their efforts to support job growth before the economic recovery is fully realized.
Oatmilk maker Oatly rose another 12.9%, following the 19% climb it made a day earlier on its first day of trading.
Nvidia, the graphics card and chip manufacturer, rose 2.5% after the company announced a four-for-one stock split. Nvidia was one of the biggest gainers of 2020.
Solid earnings helped lift several companies. Foot Locker rose 3.3% after reporting solid first-quarter earnings and revenue. Agricultural equipment maker Deere gained 3.6% after beating Wall Street's fiscal second-quarter profit forecasts.
Treasury yields were mostly stable. The yield on the 10-year Treasury note held steady at 1.63%.
Featured Article: What is total return in investing?7 Semiconductor Stocks Set to Gain From the Chip Shortage
Who knew that something so tiny could create such a big problem? However, that’s the case with the semiconductor industry. Chip manufacturers are facing supply chain disruptions due to the Covid-19 pandemic.
Semiconductors are in high demand for the big tech companies who need the chips to power the servers for their data centers. But they are also needed for much of the technology we take for granted including laptops, tablets, mobile phones, gaming consoles, and automobiles – a sector that seems to be at the root of the current crisis.
Any weekend mechanic knows that even traditional internal combustion cars are heavily reliant on electronics. In fact, electronic parts and components account for 40% of a new, internal combustion vehicle. That’s more than doubled since 2000.
However as it turns out, some manufacturers may have overestimated how soon consumers would be ready for an “all-electric” future. And that meant that they didn’t forecast how much demand there would be for the kind of chips needed to do the mundane, but vital tasks of steering, braking, and even powering windows up and down.
Part of the problem is that U.S. businesses are heavily reliant on countries like China and Taiwan for their semiconductors. In fact, only about 12.5% of semiconductor manufacturing is done in the United States.
Of course, this creates a tremendous opportunity for the companies that manufacture these chips. And it comes at a good time. The semiconductor sector is notoriously cyclical and was coming down from the elevated demand for the 5G buildout.
In this special presentation, we’ll give you a list of seven semiconductor companies that you can invest in to take advantage of this opportunity.
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