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Technology stocks push US markets lower

2021-07-17 HKT 04:32
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  • Wall Street ended lower, with tech heavyweights retreating and investors worried about the Delta coronavirus variant. File photo: Shutterstock
    Wall Street ended lower, with tech heavyweights retreating and investors worried about the Delta coronavirus variant. File photo: Shutterstock
US stock markets ended lower on Friday, weighed down by declines in Amazon, Apple and other heavyweight technology stocks, while investors worried about a rise in coronavirus cases tied to the highly contagious Delta variant.

On Thursday, Los Angeles County said it would reimpose its mask mandate this weekend. On Friday, public health officials said US coronavirus cases were up 70 percent over the previous week, with deaths up 26 percent .

Cruise lines Carnival Corp and Norwegian Cruise Line both fell sharply.

"COVID is starting to affect the market, ironically, for the first time since last summer, when the reopening trade began," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.

Amazon, Apple and Nvidia all fell and were among the stocks that contributed most to the S&P 500 and Nasdaq's declines. The S&P 500 technology sector index dipped for a second session after hitting a record on Wednesday.

The utilities index rallied, while the real estate index rose to a record high.

This week, investors have balanced worries about a recent inflation spike with reassurances from Fed Chair Jerome Powell that the surge in prices is temporary.

Second-quarter earnings season picks up next week, with reports from companies including Netflix, Johnson & Johnson, Verizon Communications, AT&T and Intel.

Analysts on average expect 72 percent growth in earnings per share for S&P 500 companies, according to IBES estimate data from Refinitiv.

With the S&P 500 up about 15 percent so far this year, investors will look for strong company forecasts to justify sky-high valuations.

"It's been hard for the market to gain here from these already elevated prices," said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.

The S&P 500 energy sector index sank, with investors worried about expectations for more supply and a rise in coronavirus cases that raised demand concerns.

Data from the Commerce Department showed retail sales rebounded 0.6 percent last month as spending is shifting back to services, bolstering expectations that economic growth accelerated in the second quarter.

The Dow Jones Industrial Average fell 0.9 percent to end at 34,687, while the S&P 500 lost 0.8 percent to 4,327.

The Nasdaq Composite dropped 0.8 percent to 14,427.

Moderna jumped to a record high after S&P Dow Jones Indices said the drugmaker will join the S&P 500 index as of the start of trading on July 21, replacing Alexion Pharmaceuticals.

Cintas surged after brokerages raised price targets on the business service provider's stock following its fourth-quarter results.

Didi Global fell after China sent state officials from at least seven departments to the ride-hailing giant for a cybersecurity review. (Reuters)