Nasdaq leads Wall Street lower after sharp rally this week
U.S. stock indexes slipped on Thursday after three straight days of gains following positive updates on the Omicron coronavirus variant, with focus now turning towards inflation data for clues on the Federal Reserve’s policy decision.
Ten of the 11 major S&P sectors declined, with real-estate, energy and consumer discretionary shares falling the most.
Heavyweight technology stocks including Microsoft Corp, Nvidia Corp and Tesla Inc fell to weigh the most on the Nasdaq index, while Apple Inc and Meta Platforms rose.
The iPhone maker’s shares were about $7 shy of their mark to reach $3 trillion in valuation that would make the company as big as the world’s fifth-largest economy after Germany.
“As Apple gets bigger and bigger, it’s a reminder of the dominance of those stocks ... that could make things difficult for investors who are not really looking to own those names,” said David Keller, chief market strategist at StockCharts.com.
Wall Street’s main indexes were supported this week by an update showing Pfizer and BioNTech’s vaccine offered some protection against the new Omicron variant.
Markets have seesawed since late November when the latest variant was discovered, with investors worried Omicron could upend a global recovery at a time when the Fed has signaled a speedier tapering of monetary stimulus to tackle surging inflation.
After falling as much as 5.24% since a record high hit on Nov. 22, the S&P 500 index has recouped nearly all its declines, now trading 1.2% below its all-time peak.
CVS Health Corp rose 3.9%, boosting the S&P 500 healthcare sector , after the drugstore operator raised its 2021 profit forecast.
All eyes are now on consumer prices index data due on Friday. A hotter-than-expected reading could strengthen the case for aggressive policy tightening ahead of the U.S. central bank’s meeting next week.
A Reuters poll of economists predicted the Fed would raise rates by 25 basis points to 0.25-0.50% in the third quarter of next year. However, most of them said the risk was that a hike comes even sooner.
At 12:02 p.m. ET, the Dow Jones Industrial Average was down 33.45 points, or 0.09%, at 35,721.30, the S&P 500 was down 15.52 points, or 0.33%, at 4,685.69, and the Nasdaq Composite was down 117.12 points, or 0.74%, at 15,669.87.
Amazon.com dipped 0.2% after Italy’s antitrust watchdog fined the e-commerce giant $1.28 billion for alleged abuse of market dominance.
Data showed initial claims for state unemployment benefits tumbled 43,000 to 184,000, dropping to the lowest level in more than 52 years last week.
“This is a loud and clear sign that we’re making strides toward a full economic recovery despite some bumps along the way,” said Mike Loewengart, managing director at E*TRADE Financial.
GameStop Corp fell 6.5% after the video game retailer said it was issued a subpoena by the U.S. securities regulator back in August for documents on an investigation into its share trading activity.
Declining issues outnumbered advancers for a 2.53-to-1 ratio on the NYSE and for a 2.37-to-1 ratio on the Nasdaq.
The S&P index recorded 15 new 52-week highs and one new low, while the Nasdaq recorded 29 new highs and 38 new lows.