3 Great Non-Tech Stocks To Buy Now For Growth And Dividends

Stocks fell Tuesday after they surged on the first day of March trading. The pullback seemed likely as the S&P posted its best day since June and the Nasdaq climbed 3% during regular hours, as buyers stepped in following a week-plus rout that saw the tech-heavy index fall nearly 8% off its February 12 records.

The tech selling occurred alongside a rapid rise in U.S. Treasury yields as Wall Street begins to increase its inflationary bet. The logic stems from more government spending and the possibility of a huge economic comeback once the coronavirus vaccine is widely distributed. Plus, many U.S. households are sitting on elevated savings and could pour back into the hardest-hit areas such as travel and leisure.

The inflation concerns help spotlight elevated valuations for tech companies and higher Treasury yields make the S&P 500’s dividend less appealing. That said, the Fed is firmly committed to its easy-money policies and the earnings picture has continued to improve for 2021.

This means the recent pullback might be nothing more than a healthy recalibration for a market that is up 75% since its March 2020 lows. The nearby chart showcases that the S&P 500 has found support at its 50-day moving average recently

Long-term, technology is likely to continue to drive market growth. Yet, there will likely be some rotation out of tech into underperforming or cyclical areas of the market as a way to play the possible economic boom.

Caterpillar (CAT Quick Quote CAT - Free Report)

Caterpillar began to break away from the market in the fall, with its shares up nearly 50% in the last six months vs. the S&P 500’s 14%. The climb comes as investors bet on an economic comeback and the possibility of infrastructure spending under the Biden administration.

The huge run saw CAT climb above its 2018 records around the November election and continue to hit new highs in 2021. The stock has slipped 5% below its late February records to sit at $216 a share.

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