By Yashaswini Swamynathan
Losses in technology stocks dragged down the Nasdaq and the S&P 500 in choppy trading on Thursday, while bank and energy shares propped up the Dow. Declines in Facebook, Microsoft and Apple pushed the Nasdaq to a two-week low, while setting the S&P 500 technology index for its worst day since August.While Wall Street has rallied since the November election on hopes that President-elect Donald Trump's policies would be market friendly, technology stocks have gained the least, rising by a mere 0.6 percent. "I think what you are seeing is people moving out of names that have been winners in the past couple of years and from companies that have predictable growth such as Facebook, Alphabet and Apple," said Michael Scanlon, managing director of Manulife Asset Management.Facebook fell 3.2 percent to $114.73 after Canaccord Genuity cut its price target on the stock, while Microsoft, Apple and Alphabet fell between 1.5 percent and 2.2 percent. However, the Dow moved higher, powered by a more than 4 percent rise in oil prices and gains in bank stocks. Brent futures hit a six-week high of $53.98. The commodity rallied nearly 9 percent on Wednesday after major oil producers agreed to cut output and support prices - the first of such a move since 2008. The S&P 500 energy index rose 1.55 percent, with shares of Exxon and Chevron leading the gainers.
Investors are now turning their attention to economic data to assess whether the Federal Reserve could raise interest rates at its meeting on Dec. 13-14. The central bank has been preparing the markets for a rate increase amid improving economic conditions. Some Fed officials have said President-elect Donald Trump's policies could boost inflation, pushing it closer to the central bank's 2 percent target. U.S. factory activity accelerated to a five-month high in November amid a pickup in new orders and production, offering more evidence that the economy gained momentum early in the fourth quarter, a Institute for Supply Management report showed.Financial index rose 1.5 percent on Thursday. The sector has risen 12.3 percent since the November election on prospects of an interest rate hike this month.
Traders have currently priced in a 90 percent chance of a rate increase in December.At 11:11 a.m. ET the Dow Jones Industrial Average was up 68.01 points, or 0.36 percent, at 19,191.59.The S&P 500 was down 2.58 points, or 0.12 percent, at 2,196.23. The Nasdaq Composite was down 51.45 points, or 0.97 percent, at 5,272.24.
Seven of the 11 major S&P sectors were trading lower, with bond proxies such as utilities and real estate being the worst hit. Bluebird Bio shares soared 23 percent to $75 after the gene-therapy developer said patients undergoing its multiple myeloma treatment showed strong benefits. Shares of Celgene, which is developing the therapy with Bluebird, was up less than 1 percent.Skechers surged 13.7 percent after Buckingham Research upgraded the shoemaker's stock to "buy" from "neutral". Declining issues outnumbered advancers on the NYSE by 1,569 to 1,339. On the Nasdaq, 1,455 issues fell and 1,202 advanced.The S&P 500 index showed 74 new 52-week highs and six new lows, while the Nasdaq recorded 134 new highs and 34 new lows. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Anil D'Silva)
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Updated Date: Dec 01, 2016 22:45 PM