Nasdaq rally cools as stimulus concerns resurface
By Shreyashi Sanyal and Devik Jain (Reuters) - The Nasdaq retreated from a record high by afternoon trading on Monday as worries over fiscal stimulus overshadowed optimism about the start of a week of earnings from mega-cap technology companies. Investors turned their focus to the U.S.
By Shreyashi Sanyal and Devik Jain
(Reuters) - The Nasdaq retreated from a record high by afternoon trading on Monday as worries over fiscal stimulus overshadowed optimism about the start of a week of earnings from mega-cap technology companies.
Investors turned their focus to the U.S. Senate, which is aiming to pass COVID-19 relief legislation before former President Donald Trump's impeachment trial begins in early February.
This comes a day after officials in President Joe Biden's administration tried to head off Republican concerns that his $1.9 trillion pandemic relief proposal was too expensive.
"The immediate question now is when stimulus aid will be approved and how much? If the Democrats take a month or so to push out stimulus then that could very well be seen as a negative by markets," said Christopher Grisanti, chief equity strategist at MAI Capital Management in Cleveland.
The Nasdaq struggled for direction, with the so-called "stay-at-home" winners including Microsoft Corp, Facebook Inc and Apple Inc rising following upbeat results from Netflix Inc last week.
Microsoft, scheduled to report results on Tuesday, rose 0.3% as Wedbush raised its price target on the software maker's stock on expectations of further growth in its cloud business for 2021.
"At the end of the day we are still going to be using Amazon and Apple and all those large cap tech names. So it's not surprising that those numbers are probably going to come out and do pretty well," said Jack Janasiewicz, portfolio manager at Natixis Investment Managers in greater Boston area.
The S&P 500 sectors housing large-cap growth stocks hit record highs earlier in the session, including technology, consumer discretionary and communication services.
Wall Street's main indexes hit all-time highs last week on hopes of a full economic reopening and efficient distribution of vaccines across the country, which is suffering from more than 175,000 new COVID-19 cases a day with millions out of work.
Earlier in the day, drugmaker Merck & Co said it would stop development of its two COVID-19 vaccines. The drugmaker's shares fell 0.5%.
Recent gainers including sectors such as financials, energy, industrials and materials led declines on Monday, while defensive utilities, consumer staples and real estate were among the few gainers.
At 12:21 p.m. ET, the Dow Jones Industrial Average was down 190.07 points, or 0.61%, at 30,806.91, the S&P 500 was down 11.33 points, or 0.29%, at 3,830.14, and the Nasdaq Composite was down 14.49 points, or 0.11%, at 13,528.57.
Declining issues outnumbered advancers for a 1.68-to-1 ratio on the NYSE and a 1.62-to-1 ratio on the Nasdaq.
The S&P index recorded 26 new 52-week highs and no new low, while the Nasdaq recorded 285 new highs and four new lows.
(Reporting by Devik Jain and Shreyashi Sanyal in Bengaluru; Additional reporting by Medha Singh; Editing by Shounak Dasgupta)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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