S&P 500 and Nasdaq fall after setting intraday records, as momentum wanes
S&P 500 index and tech-heavy Nasdaq index retreated on Thursday after reaching intraday records earlier in the day. Investors locked in gains as the U.S. shutdown entered its second day.
The rapid pullback highlights how fragile the market momentum is, with stretched values and uncertainty over the Federal Reserve’s lack of visibility in economic data keeping traders at edge.
Anthony Saglimbene is the chief market strategist of Ameriprise Financial.
Tesla fell nearly 2% following initial gains after a strong report on quarterly deliveries. Some analysts warned that the removal of the $7500 federal tax credit could have a negative impact on sales in the coming quarters.
The S&P500 healthcare sector fell by 0.4% and is on course to end its four-day winning streak.
A report by global outplacement company Challenger, Gray & Christmas also revealed that employers in the United States announced fewer layoffs during September, but their hiring plans for this year have been at the lowest level since 2009. The report came just a day after the ADP National Employment Report, which was weaker than expected on Wednesday.
Joe Mazzola is the head trading and derivatives analyst at Charles Schwab.
At 11:52 am. The Dow Jones Industrial Average dropped 71.44, or 0.15 %, to 46.369.66. The S&P 500 fell 9.54, or 0.14 %, to 6,701.35. And the Nasdaq Composite rose 25.95, or 0.10 %, to 22781.11.
In the morning session, both the S&P 500 and Nasdaq Indexes reached their intraday records of 6,731.94 y 22,900.60 respectively. The S&P 500 forward price-to earnings ratio has risen to 23.1. This is its highest level since September 2020.
S&P 500's biggest gainer was the tech sector with a 0.3% increase. Nvidia grew by 1% while Broadcom, Advanced Micro Devices, and Broadcom were all up by 2% or more.
Stocks catapulted a broader semiconductor index into a new record high and helped boost Nasdaq. Consumer discretionary stocks dropped 0.7%, and were the largest drag on the S&P 500.
Equifax and TransUnion, two credit bureaus, fell by 9.2% and 12.0%, respectively, in the stock market after FICO launched its program, which could give mortgage lenders access to credit scores, without having to rely on bureaus. FICO surged by 18.9%, topping the benchmark index.
Occidental Petroleum announced that it will sell its petrochemicals division to Warren Buffett’s Berkshire Hathaway, for $9.7 Billion. Shares in the oil and gas company fell by 5.9%.
On the NYSE, declining issues outnumbered advancing ones by a ratio of 1.78 to 1.25 and on the Nasdaq by a ratio of 1.25 to 1.
The S&P 500 recorded 31 new 52-week lows and 10 new highs, while the Nasdaq Composite registered 108 new lows and 61 highs.
(source: Reuters)
