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Feb. 28, 2020, 6:10 p.m. EST

Chip, software stocks rebound as broader U.S. market keeps bleeding out

Nvidia leads handful of S&P 500 tech gainers in February with 14% rise

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By Wallace Witkowski, MarketWatch


Bloomberg News

Chip stocks and software stocks broke ranks with the rest of the technology sector on Friday, bouncing back amid a week long bloodbath for the broader U.S. stock market fueled by fear the COVID-19 epidemic may disrupt manufacturing supply lines.

Nvidia Corp. /zigman2/quotes/200467500/composite NVDA +0.86% led gainers in the chip subsector Friday, closing up 6.9% at $270.07, as the PHLX Semiconductor Index /zigman2/quotes/210598361/realtime SOX +1.35%  rose 2.2%.

In comparison, the S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.45%  finished down 0.8% Friday, for a nearly 12% drop on the week, and the tech-heavy Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +0.52%  closed up less than 0.1%, for a nearly 11% weekly drop.

Nvidia shares finished down 8.2% for the week, but up more than 14% for the month, making Nvidia only one of two chip stocks on the S&P 500 with a February gain. The other was Applied Materials Inc. /zigman2/quotes/209393259/composite AMAT +2.21% , with a 0.2% gain for February. The SOX index was down nearly 10% for the week and down 4.7% for February.

Read: Nvidia stock rockets past $300 to third straight record close as holdout analyst turns bullish

The only other tech stocks listed on the S&P 500 index showing February gains were Leidos Holdings Inc. /zigman2/quotes/202902477/composite LDOS +0.35%  , up 2.2%; Keysight Technologies Inc. /zigman2/quotes/207530903/composite KEYS +1.02% , up 1.9%; and Jack Henry & Associates Inc. /zigman2/quotes/201857446/composite JKHY +0.37% , up 1.5%.

The only tech stock on the S&P 500 to show a gain on the week also held the distinction of being a chip stock. Qorvo Inc. /zigman2/quotes/209919828/composite QRVO +1.88%  shares rose 6.1% to finish Friday at $100.58, for a 2.4% weekly gain. Shares, however, fell 5% in February.

On the whole, chip stocks fared best on Friday with 13 out of the 16 chip stocks on the S&P 500 closing higher, beating out every other tech subsector on the index.

Of the 14 stocks in the software subsector, nine finished higher on Friday with Autodesk Inc. /zigman2/quotes/209828392/composite ADSK -0.44%  up 5.7% and Microsoft Corp. /zigman2/quotes/207732364/composite MSFT +0.76%  up 2.4%. Oracle Corp. /zigman2/quotes/202180826/composite ORCL +0.81%  led decliners with shares down 2.6%. The iShares Expanded Tech-Software Sector ETF /zigman2/quotes/201870252/composite IGV +0.23%  finished up 1% Friday, and declined 9.2% for the week and 5.7% for the month.

Two out of the eight stocks in the electronic equipment instruments and components subsector traded higher with IPG Photonics Corp. /zigman2/quotes/203325788/composite IPGP +2.12%  leading gainers up 3.9%, and FLIR Systems Inc. /zigman2/quotes/207487690/composite FLIR +3.18%  weighing on decliners down 4.4%

Eight out of the 21 IT services stocks on the S&P 500 finished higher Friday with Mastercard Inc. /zigman2/quotes/207581792/composite MA +0.42%  leading gainers to finish up 1.6%. Both Accenture PLC /zigman2/quotes/201711136/composite ACN +0.53%  and Akamai Technologies Inc. /zigman2/quotes/203072268/composite AKAM +6.39%  finished down 3.1%, while International Business Machines Corp. /zigman2/quotes/203856914/composite IBM +0.98%  weighed on the subsector with a 2.2% loss.

All five stocks in the communications equipment subsector finished lower, ranging from a less than 0.1% loss for Arista Networks Inc. /zigman2/quotes/206966450/composite ANET +0.51%  to a 2.3% decline in F5 Networks Inc. /zigman2/quotes/209237881/composite FFIV +0.88%  

Of the seven technology hardware storage and peripherals stocks on the S&P 500, only Hewlett Packard Enterprise Co. /zigman2/quotes/201998588/composite HPE -0.11%  and Western Digital Corp. /zigman2/quotes/204213617/composite WDC -0.02%  finished higher with 1.7% and 0.7% gains, respectively. Apple Inc. /zigman2/quotes/202934861/composite AAPL +0.0000%  shares declined less than 0.1%, while shares of HP Inc. /zigman2/quotes/203461582/composite HPQ +0.41%  and Xerox Holdings Corp. /zigman2/quotes/201169674/composite XRX +3.83%  both closed down nearly 5%.

Outside of the S&P 500, the clear winner in tech from COVID-19 fears has been videoconferencing stock Zoom Video Communications Inc. /zigman2/quotes/211319643/composite ZM +1.01%  While shares declined 7.5% on Friday, the stock is up 3.2% for the week and nearly 38% for the month.

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Wallace Witkowski is a MarketWatch news editor in San Francisco. Follow him on Twitter @wmwitkowski.

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