Tech stocks drag Wall Street lower; Biden's presser in focus

By Devik Jain (Reuters) - The technology-heavy Nasdaq led Wall Street lower on Thursday as a rotation out of richly valued stocks into underpriced sectors added to pressure from quarter-end rebalancing by institutional investors. The main U.S.

Reuters March 26, 2021 00:07:17 IST
Tech stocks drag Wall Street lower; Biden's presser in focus

Tech stocks drag Wall Street lower Bidens presser in focus

By Devik Jain

(Reuters) - The technology-heavy Nasdaq led Wall Street lower on Thursday as a rotation out of richly valued stocks into underpriced sectors added to pressure from quarter-end rebalancing by institutional investors.

The main U.S. stock indexes also shrugged off the Labor Department's jobless claims report - the most timely indicator of economic health - that showed fewer-than-expected Americans filed new claims for state unemployment benefits last week.

Seven of the 11 S&P sectors fell, led by the communication services and technology indexes, which house some of the best-performing stocks of 2020 including Apple Inc, Microsoft Corp and Netflix Inc.

"This is likely just one of those periods where you have a little profit taking and a little quarter-end rebalancing, but this little pullback will probably run its course and we'll see the market back at new highs fairly soon," said Jordan Kahn, chief investment officer of ACM Funds in Los Angeles.

The Nasdaq Composite has fallen in March after four straight months of gains as rosy economic projections lifted demand for undervalued cyclical stocks, but also raised fears of higher inflation and a potential tax hike.

In testimonies to Congress this week, Federal Reserve Chair Jerome Powell expressed optimism about a strong U.S. economic rebound, while Treasury Secretary Janet Yellen said future tax hikes will be needed to pay for public investments.

President Joe Biden is expected to lay out a new goal for U.S. vaccinations against COVID-19 at his first formal White House news conference beginning at 1:15 p.m. ET (1715 GMT). Next week, he is also set to unveil a multitrillion-dollar infrastructure plan in Pittsburgh.

"It's a tale of two different markets at this point and it depends on what the market wants to focus on," said Faron Daugs, founder and chief executive officer of Harrison Wallace Financial Group in Libertyville, Illinois.

"Does it want to focus on stimulus, increased vaccinations and re-opening economies or on potential taxes, increased regulation potentially in certain sectors, extremely high spending and inflation."

Heavyweight technology stocks Facebook Inc, Google parent Alphabet Inc and Twitter Inc slipped about 1% ahead of their chief executives' testimony before Congress about extremism and misinformation on their services.

By 12:13 p.m. ET, the Dow Jones Industrial Average was down 0.18%, the S&P 500 was down 0.24% and the Nasdaq Composite was down 0.51%.

The CBOE volatility index was up for a third straight day after briefly falling to its pre-pandemic lows earlier this week.

Energy stocks shed 1%, tracking lower crude prices.

Utilities, consumer staples and real estate stocks - perceived as safer during times of economic uncertainty - were among the few gainers on the day.

Shares of Nike Inc fell 4.4% as the sporting goods giant faced a Chinese social media backlash over its comments about reports of forced labor in Xinjiang.

Darden Restaurants Inc added 4.3% after it announced a new share buyback plan and forecast upbeat fourth-quarter revenue and profit.

Declining issues nearly matched advancers on the NYSE and the Nasdaq.

The S&P index recorded three new 52-week highs and no new low, while the Nasdaq recorded 20 new highs and 150 new lows.

(Reporting by Devik Jain in Bengaluru; Editing by Arun Koyyur, Maju Samuel and Sagarika Jaisinghani)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.