Wall Street poised for second straight weekly drop

By Chuck Mikolajczak NEW YORK (Reuters) - The S&P and Nasdaq were lower on Friday as early gains in the technology sector and growth names faded, with each of the three major Wall Street averages on track for their second straight weekly decline. After rising to a record high of $61.86, shares of Oracle Corp turned lower along with the rest of the technology sector .

Reuters September 12, 2020 03:05:10 IST
Wall Street poised for second straight weekly drop

Wall Street poised for second straight weekly drop

By Chuck Mikolajczak

NEW YORK (Reuters) - The S&P and Nasdaq were lower on Friday as early gains in the technology sector and growth names faded, with each of the three major Wall Street averages on track for their second straight weekly decline.

After rising to a record high of $61.86, shares of Oracle Corp turned lower along with the rest of the technology sector <.SPLRCT>. The cloud services company's earnings beat estimates and it signaled a recovery in client spending due to higher demand led by the work-at-home trend.

The tech sector fell 1.39% and was on track for its fifth decline in six days and biggest weekly percentage decline since March as investors have moved away from companies such as Apple Inc that have helped spearhead the rebound in stocks from coronavirus-driven lows in March.

In addition, the sector was on pace to close below its 50-day moving average, a technical support level, for the first time since April 21.

Growth stocks <.IGX>, which include many tech names along with others that have benefited from government-imposed lockdowns such as Amazon.com Inc , also moved lower, down 0.82%. In contrast, value names <.IVX> edged up 0.09%.

"We are in another period out of growth and into value, we get these about once a month. They last either a couple of days or a week," said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. 

"And while growth isn’t cheap, it is growth and a lot of these companies are doing well during the pandemic so I wouldn’t be surprised to see money coming back to them."

The Dow Jones Industrial Average <.DJI> was up 8.07 points, or 0.03%, at 27,542.65, the S&P 500 <.SPX> lost 15.74 points, or 0.47%, to 3,323.45 and the Nasdaq Composite <.IXIC> dropped 136.94 points, or 1.25%, to 10,782.65.

Industrials <.SPLRCI> and financial stocks <.SPSY> provided the biggest boost to the benchmark index. Material <.SPLRCM> was the only S&P sector poised to end higher on the week.

Many investors view the recent slump as a healthy consolidation after a stunning five-month rally in the S&P 500 that was powered by a narrow group of heavyweight tech companies and massive amounts of fiscal and monetary stimulus.

Meanwhile, latest data showed U.S. consumer prices increased solidly in August, but the labor market's slack is likely to keep a lid on inflation as the economy recovers from the COVID-19 recession.

Another beneficiary of coronavirus lockdowns, exercise bike maker Peloton Interactive Inc , gave up early gains and turned negative, down 2.1% even as it reported forecast-beating quarterly revenue due to a surge in subscribers and increased demand for its fitness products during the pandemic.

(Reporting by Chuck Mikolajczak in New York; Editing by Matthew Lewis)

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

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