NEW YORK, Aug 31 — The S&P 500 and the Nasdaq slipped today, led by heavyweight technology shares, but were still on course to notch another month of gains following the Federal Reserve’s dovish stance on its massive asset purchases.
Seven of the 11 major S&P sectors declined in early trading, with technology and energy shares among the top losers.
Shares of Apple fell 1 per cent after hitting a record high in the previous session, while Microsoft, Amazon and Google-owner Alphabet Inc and chipmaker Nvidia Corp dropped, knocking the Nasdaq off its record peak.
Zoom Video Communications Inc tumbled 16.7 per cent as it signalled a faster-than-expected easing in demand for its video-conferencing service after a pandemic-driven boom.
Still, the benchmark S&P 500 was headed for its seventh consecutive month of gains, with a near 3 per cent rise in August, after Fed Chair Jerome Powell last week signalled no rush to tighten its monetary policy, helping equities continue their rally.
“There continues to be a positive bias towards US equities and investors are just holding back as we near the anticipated labour market data,” said Arthur Weise, chief investment officer of Kingsland Growth Advisors.
“Expectations are for tech stocks to continue to perform better on the back of strong fundamentals and as there still remains some uncertainty around the effect of the coronavirus on economic growth.”
While a strong recovery in economic growth and corporate earnings have put the S&P 500 on pace for its longest monthly winning run since 2018, investors are concerned about rising coronavirus cases and how quickly the Fed will tighten monetary policy once it begins tapering.
A Reuters poll last week showed strategists believe the S&P 500 is likely to end 2021 not far from its current level.
Investors will also focus on the US monthly jobs data later in the week, which could feed into the Fed’s decision at its September policy meeting.
At 10.17am ET, the Dow Jones Industrial Average was up 13.74 points, or 0.04 per cent, at 35,413.58, the S&P 500 was down 4.53 points, or 0.10 per cent, at 4,524.26, and the Nasdaq Composite was down 56.68 points, or 0.37 per cent, at 15,209.21, on pace to end higher for the third straight month.
Among other stocks, Textron Inc rose 1.4 per cent after Cowen upgraded the Cessna business jet maker’s stock to “outperform” from “market perform” and raised its price target to Street-high of US$95 (RM394).
Advancing issues outnumbered decliners by a 1.15-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.13-to-1 ratio on the Nasdaq.
The S&P index recorded 28 new 52-week highs and no new low, while the Nasdaq recorded 62 new highs and 15 new lows. — Reuters
