SP 500, Nasdaq fall as high-flying tech stocks slide

Source: Reuters

Source: Reuters

Wall Street’s major indexes dropped on Wednesday, weighed down by technology stocks as investors unwound positions in high-flying shares and pivoted to sectors that are likely to benefit from an economic reopening on hopes of swift vaccinations.

Microsoft Corp, Apple Inc and Amazon.com Inc dropped 0.9 percent and 1.3 percent, weighing the most on the S&P 500. Financials and energy jumped over 1 percent, while industrials also edged up. The remaining eight S&P sectors declined.

The Russell 1000 value index, which is heavily weighted toward cyclical sectors, rose 0.4 percent, while its growth index, comprising large tech companies, fell 0.8 percent.

Data showed U.S. private employers hired fewer workers than expected in February, suggesting the labor market was struggling to regain speed despite the nation’s improving public health picture.

A more comprehensive monthly jobs report is due on Friday.

The report “is a reminder that we’re still battling the effects of the pandemic,” said Mike Loewengart, managing director of investment strategy at E*TRADE Financial.

“In the backdrop we have the promise of a widely vaccinated population in pretty short order, stimulus relief making moves in Congress, and the Fed’s ultra-accommodative stance.”

The U.S. 10-year Treasury yield ticked up to 1.48 percent, pressuring areas of the market with high valuations. It was still off last week’s peak of above 1.61 percent.

Earlier, S&P futures had risen as much as 0.8 percent as President Joe Biden said that the United States will have enough COVID-19 vaccine for every American adult by the end of May.

Texas also sweepingly rolled back coronavirus restrictions on Tuesday, lifting a mask mandate and saying most businesses may open at full capacity next week as many U.S. states record a sharp decline in new infections and hospitalization.

The U.S. Senate is expected to take up Biden’s $ 1.9 trillion coronavirus relief package on Wednesday, with Democrats aiming to get it signed into law before March 14, when some current jobless benefits expire.

At 10:07 a.m. ET, the Dow Jones Industrial Average fell 26.45 points, or 0.08 percent, to 31,365.07, the S&P 500 lost 22.69 points, or 0.59 percent, to 3,847.60 and the Nasdaq Composite lost 152.25 points, or 1.14 percent, to 13,206.54.

Exxon Mobil Corp, ahead of a closely watched investor meeting, rose 0.4 percent after the company said it would grow its dividend and cut debt through 2025.

Shares in mortgage lender UWM Holdings Corp jumped about 9 percent as the new targets of a short-squeeze gain popularity on internet message boards.

Another report showed U.S. services industry activity unexpectedly slowed in February amid winter storms while a measure of prices paid by companies for inputs surged to the highest level in nearly 12-1/2 years.

Declining issues outnumbered advancers by a 1.3-to-1 ratio on the NYSE and by a 1.5-to-1 ratio on the Nasdaq.

The S&P 500 posted 23 new 52-week highs and no new low, while the Nasdaq recorded 112 new highs and 47 new lows.