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[NEW YORK] A sharp decline in technology stocks pulled both the Nasdaq and the S&P 500 indexes into the red on Thursday, while the Dow managed to notch a record closing high with a lift from bank and energy shares.
Declines in Facebook, off 2.8 per cent at US$115.14, and Microsoft, down 1.8 per cent to US$59.18, sent the Nasdaq to its lowest close since Nov 14, while the S&P 500 technology index dropped 2.3 per cent, its worst daily performance since June 24.
While the S&P 500 has gained more than 2 per cent since the November election on hopes that President-elect Donald Trump's policies will trigger inflation and hasten a rise in interest rates, technology stocks have failed to participate, dropping nearly 3 per cent.
"In a higher rate environment you are going to want to pay less for growth further out. To a large extent that is probably what is happening in the higher (price-to-earnings) stocks," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.
"Everybody is getting tarred and feathered."
The Dow advanced as gains in high-priced names in the financial and energy sectors climbed. Goldman Sachs, up 3.3 per cent, accounted for more than 50 points to the plus side for the price-weighted index. The stock is up more than 24 per cent since the election.
The Dow Jones industrial average rose 68.35 points, or 0.36 per cent, to 19,191.93, the S&P 500 lost 7.73 points, or 0.35 per cent, to 2,191.08 and the Nasdaq Composite dropped 72.57 points, or 1.36 per cent, to 5,251.11.
A continued rally in oil helped energy names such as Chevron advance. Brent futures settled up more than 4 per cent after a nearly 9 per cent jump on Wednesday after major oil producers agreed to cut output and support prices, the first such move since 2008.
The S&P 500 energy index rose 0.3 per cent, while the S&P financial index climbed 1.7 per cent, its best day in three weeks.
Investors are turning now to Friday's US payrolls report for confirmation the economy continues to strengthen, with an eye on an expected hike in benchmark US interest rates by the Federal Reserve at its meeting on Dec 13-14.
Traders have priced in a 91 per cent chance of a rate increase in December, according to Thomson Reuters data.
Dollar General shares were among the worst performers on the S&P, falling 5 per cent after the discount retailer reported a surprise drop in quarterly comparable sales and tempered its full-year profit forecast.
Bluebird Bio soared 13.8 per cent to US$68.65 after the gene-therapy developer said patients undergoing its multiple myeloma treatment showed strong benefits. Shares of Celgene, which is developing the therapy with Bluebird, edged up 0.3 per cent to US$118.87.
Skechers surged 15.9 per cent after the shoe seller's chief executive bought US$11 million worth of stock.
Declining issues outnumbered advancing ones on the NYSE by a 1.66-to-1 ratio; on Nasdaq, a 1.61-to-1 ratio favoured decliners.
The S&P 500 posted 79 new 52-week highs and seven new lows; the Nasdaq Composite recorded 178 new highs and 63 new lows.
About 9.13 billion shares changed hands in US exchanges, above the 7.96 billion daily average over the last 20 sessions.