Wall Street falls as energy and tech stocks drop I Business
 
 
 
 
 
 

Wall Street falls as energy and tech stocks drop

/ 10:57 AM September 16, 2021

Wall Street indexes fell on Thursday as an unexpected rise in retail sales pointed to resilience in the economic recovery, pushing up yields and spurring a broad move out of heavyweight technology stocks.

Economically sensitive sectors fared better than their peers, with financial stocks falling 0.2% – the least among the S&P sectors. An index of transport stocks – a common gauge of economic optimism – added 0.2%.

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The energy sector tumbled 1.4% after a recent rally, as crude prices retreated due to the receding threat to U.S. Gulf crude production from Hurricane Nicholas.

Losses were dominated by technology stocks as the positive economic data pushed up Treasury yields and allayed some concerns over slowing growth.

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“Tech was the out performer for most of August, and as we head into September and see more of a normalization on the yield on the 10-year, that has tended to cause a rotation out of tech,” said Art Hogan, chief market strategist at National Securities in New York.

“The mega-cap technology names do well agnostic of the pace of economic growth … but when you start to get reports that the economy may be operating at a pace that’s faster than anticipated, then technology tends to be less in favor as compared to cyclicals.”

Wall Street falls as energy and tech stocks drop

People are seen on Wall Street outside the New York Stock Exchange (NYSE) in New York City, U.S., March 19, 2021. REUTERS/Brendan McDermid/File Photo

The strong data also lifted the dollar, which weighed on commodity prices and sent the materials sector down 1.3%.

Stocks have struggled to hold on to record highs hit earlier this month due to seasonally weaker trends in September, as well as concerns that the economic recovery could lose steam towards the end of the year.

Data earlier in the day showed the labor market remained under pressure, with initial jobless claims coming slightly higher than expected last week.

But a raft of strong recent economic readings has prompted analysts to speculate whether the Federal Reserve would bring forward its plans for tapering stimulus. The Fed is widely expected to stand pat at its meeting next week.

At 11:57 am ET, the Dow Jones Industrial Average fell 196.47 points, or 0.56%, to 34,617.92, the S&P 500 lost 27.65 points, or 0.62 %, to 4,453.05 and the Nasdaq Composite lost 83.43 points, or 0.55 %, to 15,078.09.

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U.S.-listed Chinese stocks extended losses, with Beijing’s regulatory overhaul of gambling in Macau coming as the latest trigger for a selloff in a sector that has already lost billions of dollars due to crackdowns on technology and education services.

U.S.-based casino operators Las Vegas Sands Corp and Wynn Resorts Ltd fell more than 3% each.

A batch of weak Chinese economic data, coupled with concerns over a debt crisis at the country’s No. 2 property developer, has also dented appetite for China-exposed stocks in recent sessions.

Among other movers, electric carmaker Tesla Inc fell 0.7% after funds run by Cathie Wood’s ARK Invest sold about $128 million worth of the firm’s shares in the past two days.

Declining issues outnumbered advancers by a 1.9-to-1 ratio on the NYSE and a 1.5-to-1 ratio on the Nasdaq.

The S&P 500 posted 6 new 52-week highs and one new low, while the Nasdaq recorded 67 new highs and 96 new lows.

(Reporting by Ambar Warrick in Bengaluru; Editing by Arun Koyyur, Maju Samuel and Aditya Soni)

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