US: Nasdaq retreats in down day for stocks
[NEW YORK] Wall Street stocks fell on Thursday after two strong sessions with the tech-rich Nasdaq underperforming other indices following mixed economic data.
The Nasdaq has repeatedly hit new records in recent weeks, but slid 0.7 per cent to end at 10,473.83.
The Dow Jones Industrial Average shed 0.5 per cent to close at 26,734.71, while the broad-based S&P 500 lost 0.3 per cent at 3,215.57.
"We seem to be getting a rotation out of tech and into cyclicals," said Art Hogan, chief market strategist at National Securities, in reference to companies more closely tied to broader economic growth.
Mr Hogan said the second-quarter earnings season, which began in earnest this week, could set up industrial shares and companies from other beaten-down sectors for gains at the expense of technology, which has soared in anticipation of outsized growth.
He said banking results this week generally outperformed expectations, with markets surprised by the extent of the bounce financials received from strong investment banking and trading activity that offset weakness in consumer-oriented businesses.
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Economic data did little to clear things up for investors, especially as the US coronavirus case count resurges in some states, which could jeopardise the recovery.
New claims for unemployment benefits last week were little changed compared with the prior week at 1.3 million, a historically high level that economists fear may accelerate again.
Meanwhile, US retail sales continued to rise in June, but at a slower pace than in May.
In individual shares, Morgan Stanley jumped 2.6 per cent after reporting higher profits due to a strong trading performance, while Bank of America slid 2.7 per cent as profits tumbled after the bank set aside to large reserves for potentially bad loans.
Johnson & Johnson advanced 0.7 per cent as it reported lower profits due to the hit from coronavirus. The company said it was pushing ahead with trials for a vaccine for Covid-19.
AFP
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