NEW YORK: The S&P 500 fell in choppy trading on Thursday as heavyweight tech-related stocks slid after a sharp rebound the previous session, while elevated jobless claims reminded investors of a still-difficult recovery ahead.
Names that have rallied since March lows, such as Apple Inc , Microsoft Corp and Amazon.com , fell between 1.4% and 2.3%.
Tesla Inc rose 0.7%, initially helping to limit the Nasdaq’s losses before the tech-heavy index’s slide widened.
The NYSE FANG+TM Index , which includes the core FAANG stocks, also fell, down -0.3%, and all subsectors of the S&P 500 traded lower.
“It’s going to be a battle for the next couple of days from investors who are trying to pick spots to get back in to technology and traders who are using some of these sharp rallies to take profit,” said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.
Wall Street’s main indexes bounced back sharply on Wednesday from their biggest three-day rout since March, as investors returned to tech-focused stocks that are deemed insulated from the current economic downturn.
The S&P tech index was down 1.8% on Thursday afternoon. Despite the recent pullback, the tech index is up about 44% in 2020, far outperforming the benchmark S&P 500’s 13.5% rise in the same period.
Many market participants view the sell-off as a bout of turbulence rather than the start of a deeper slide.
“If (the stock market) today closes up, even if they’re small gains, that’s going to give more confidence back to Wall Street participants to feel more comfortable to get back in,” said Robert Pavlik, chief investment strategist at SlateStone Wealth LLC in New York.
The CBOE volatility index edged up on Thursday. The index hit a near three-month high at the start of a historically tumultuous September. Investors have also remained cautious as data paints a mixed picture of U.S. economic health.
The number of Americans filing new claims for unemployment benefits remained high last week, Labor Department data showed, as layoffs and furloughs persisted across industries.
A separate report showed U.S. producer prices rose slightly more than expected in August as the cost of services increased solidly.
The U.S. Senate on Thursday killed a Republican bill that would have provided around $300 billion in new coronavirus aid, as Democrats seeking far more funding prevented it from advancing.
At 2:25 p.m. EDT, the Dow Jones Industrial Average was down 274.17 points, or 0.98%, at 27,666.3, the S&P 500 lost 41.27 points, or 1.21%, to 3,357.69 and the Nasdaq Composite dropped 153.66 points, or 1.38%, to 10,987.91. Energy stocks dropped 2.5% as oil prices extended losses after U.S. data showed a surprise build in crude stockpiles last week and on forecasts for lower global oil demand. [O/R]
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