The S&P 500 has dropped, pulled lower by Microsoft Corp and Apple Inc, as elevated levels of unemployment claims in the US heightened concerns about the economic toll from rising coronavirus cases.
US retail sales increased more than expected in June but a resurgence in new COVID-19 cases is undercutting the budding recovery, keeping 32 million people in the US on unemployment benefits.
A jump in cases of the virus has forced California and other states to shut down again, sparking fears of more business damage and slowing the pace of a Wall Street rally.
The S&P 500 is about 5.0 per cent below its February record high.
“The economic data shows there is still a challenge going forward,” said Willie Delwiche, an investment strategist at Baird in Milwaukee.
“Congress better get its act together and pass another fiscal stimulus.”
The S&P real estate and technology indexes each lost more than 1.0 per cent, more than any others.
Apple declined 1.2 per cent and Microsoft lost 2.0 per cent, each weighing more than any other company on the S&P 500.
The S&P 500 has exceeded the Nasdaq by nearly 3.0 percentage points over the past week, its greatest five-day outperformance over the Nasdaq since late March, reflecting a shift away from Amazon.com, Microsoft and other major technology companies that have led Wall Street’s gains in recent months.
“This is an early indication of good signs that money is now flowing away from completely overbought Nasdaq into those names that will bode well when the economy starts finding more of a solid footing,” said Andrew Smith, chief investment strategist at Dallas, Texas-based Delos Capital Advisors.
Twitter Inc fell 1.1 per cent after hackers accessed its internal systems to hijack some of the platform’s top voices, including US presidential candidate Joe Biden, reality TV star Kim Kardashian West, former US president Barack Obama and billionaire Elon Musk and used them to solicit digital currency.
In extended trade, Netflix tumbled 10 per cent after the streaming video service’s quarterly report.
The Dow Jones Industrial Average fell 0.5 per cent to end at 26,734.71 points, while the S&P 500 lost 0.34 per cent to 3,215.57 and the Nasdaq Composite dropped 0.73 per cent, to 10,473.83.
Rounding up earnings reports of big banks, Bank of America Corp fell 2.7 per cent after its second-quarter profit more than halved, while Morgan Stanley rose 2.5 per cent after posting a record quarterly profit.
American Airlines tumbled 7.4 per cent after it sent 25,000 notices of potential furloughs to frontline workers and warned that demand for air travel is slowing again.
Tesla Inc declined nearly 3.0 per cent after its vehicle registrations nearly halved in the US state of California during the second quarter, according to data from a marketing research firm.
Declining issues outnumbered advancing ones on the NYSE by a 1.26-to-1 ratio; on Nasdaq, a 1.48-to-1 ratio favoured decliners.
The S&P 500 posted 30 new 52-week highs and no new lows; the Nasdaq Composite recorded 76 new highs and 14 new lows.
Volume on US exchanges was 9.6 billion shares compared with the 11.7 billion average for the full session over the last 20 trading days.