The S&P 500 has lost ground as investors took profits in advance of Friday’s jobs report, ending a four-day rally driven by rising economic sentiment.
The Nasdaq joined the S&P 500 in negative territory while the blue-chip Dow posted a nominal gain.
“We were pretty overvalued going into this week,” said Chris Zaccarelli, chief investment officer, Independent Advisor Alliance, Charlotte, NC.
“It’s not surprising to see a pullback.”
Still, all three major indexes have shown remarkable resilience since their late March plunge, with the Nasdaq, the S&P 500 and the Dow about 2.0 per cent, 8.0 per cent and 11 per cent below their respective record highs reached in February.
“This market has gone up so far so fast there’s a lot of people saying, ‘I’m going to take a little profit,'” said Jim Paulson, chief investment strategist at The Leuthold Group in Minneapolis.
Economic data showed the number of people in the US filing for unemployment benefits dipped below 2 million for the first time since mid-March, and plummeting international commerce resulted in a net widening of the US trade gap.
Friday’s much-anticipated jobs report from the Labor Department is expected to show the US unemployment rate sky-rocketing to a historic 19.7 per cent.
Violent protests against the death of George Floyd appeared to abate overnight as prosecutors brought new charges against the officers implicated in the killing.
The European Central Bank approved a stimulus package that surpassed expectations, nearly doubling the size of its Pandemic Emergency Purchase Plan to 1.35 trillion euros.
Its US counterpart, the Federal Reserve, is due to meet next week for its two-day policy meeting.
The Dow Jones Industrial Average rose 11.93 points, or 0.05 per cent, to 26,281.82, the S&P 500 lost 10.52 points, or 0.34 per cent, to 3,112.35 and the Nasdaq Composite dropped 67.10 points, or 0.69 per cent, to 9,615.81.
Of the 11 major sectors in the S&P 500, all but financials, industrials and materials were in the red in a continuation of a rotation in cyclicals.
American Airlines Group Inc announced it would beef up its flight schedule in July to 55 per cent of its year-ago capacity as the US economy reopens, sending its shares soaring 41.2 per cent.
The hard-hit commercial airline industry also jumped on the news, with the ARCA Airline index gaining 10.1 per cent.
Global online commerce platform EBay Inc rose 6.3 per cent after raising current quarter forecasts due to a surge in customer orders.
The Department of Justice gave anti-trust approval for Charles Schwab Corp’s purchase of TD Ameritrade Holding Corp, sending their shares up 5.5 per cent and 9.0 per cent, respectively.
JM Smucker Co fell 4.8 per cent after the packaged food company forecast a decline in full-year sales.
Advancing issues outnumbered declining ones on the NYSE by a 1.08-to-1 ratio; on Nasdaq, a 1.06-to-1 ratio favoured advancers.
The S&P 500 posted 16 new 52-week highs and no new lows; the Nasdaq Composite recorded 52 new highs and 10 new lows.
Volume on US exchanges was 14.46 billion shares, compared with the 11.68 billion average over the last 20 trading days.