Wall Street slips from records with Nasdaq leading declines
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[March 09, 2024]
By Sinéad Carew and Bansari Mayur Kamdar
(Reuters) - The S&P 500 and Nasdaq closed lower on Friday after touching
record highs during the session, with high-flying chip stocks going into
reverse and a mixed labor market report that showed more new jobs than
expected with a rising unemployment rate.
The S&P and Nasdaq briefly hit intraday record highs but started to lose
steam late morning. The Philadelphia Semiconductor Index sharply
underperformed and ended the day down 4% after touching an intraday
record high.
Artificial intelligence chip darling Nvidia closed down 5.6% to snap a
six-session winning streak. Early in the session it had been up more
than 5%.
In the chip index, Broadcom sank 7% after its full-year forecast failed
to impress investors and Marvell Technology tumbled 11.4% after it
forecast first-quarter results below market expectations on soft demand.
Stocks had opened higher after data showed U.S. job growth accelerated
in February, with nonfarm payrolls increasing by 275,000 jobs against an
expected 200,000 rise. January jobs numbers were revised lower.
Also, the unemployment rate rose to 3.9% in February after holding at
3.7% for three straight months, while wage growth slowed to 0.1% on a
monthly basis.
"Today is just profit taking," said Brian Price, head of investment
management for Commonwealth Financial Network who described the week as
"a microcosm of the year so far" with modest pull backs and buyers
stepping in.
Price pointed to some signs of consumers spending more cautiously, with
Costco Wholesale shares closing down 7.6% as quarterly sales fell short
of estimates due to tepid demand for higher-margin goods.
But Price said "the general bias right now is for the market to continue
to move higher, absent negative catalysts."
"That's really what the market is hanging its hat on right now, that
inflation is going to continue to be benign, that the Fed is going to
start to ease."
Next week's February data including consumer prices (CPI) and retail
sales will offer more cues on the prospects for potential rate cuts.
On Thursday, Federal Reserve Chair Jerome Powell said the central bank
was "not far" from gaining the confidence inflation is falling
sufficiently to begin cutting interest rates.
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Traders work on the floor at the New York Stock Exchange (NYSE) in
New York City, U.S., March 7, 2024. REUTERS/Brendan McDermid/FILE
PHOTO
The Dow Jones Industrial Average fell 68.66 points, or 0.18%, to
38,722.69, the S&P 500 lost 33.67 points, or 0.65%, to 5,123.69 and
the Nasdaq Composite lost 188.26 points, or 1.16%, to 16,085.11.
The biggest loser among the S&P 500's 11 major sectors was
technology, which ended down 1.8%, followed by consumer staples,
which fell 0.8%, with a big drag from Costco.
For the week the S&P 500 lost 0.26% while Nasdaq fell 1.17% and the
Dow dropped 0.93%.
"People may be taking some chips off the table. We've had a decent
run. Some of the technology names had moved up quite a bit," said
Charlie Ripley, Senior Investment Strategist for Allianz Investment
Management.
"When you've markets which have run up as much as this has since the
start of the year, with returns coming in a strong as they have,
these types of pull backs are healthy to see."
The biggest gainer was real estate, which closed up 1.1% followed by
energy, which added 0.4%.
Also on the bright side, Gap shares finished up 8.2% after the
retailer beat Wall Street expectations for fourth-quarter results,
buoyed by strong demand on improved product offerings at its Old
Navy and namesake brands during the holiday season, and lower
markdowns.
Advancing issues outnumbered decliners by a 1.25-to-1 ratio on the
NYSE where there were 708 new highs and 48 new lows.
On the Nasdaq 2,086 stocks rose and 2,192 fell as declining issues
outnumbered advancers by about a 1.05-to-1 ratio.
The S&P 500 posted 65 new 52-week highs and no new lows while the
Nasdaq recorded 351 new highs and 83 new lows.
On U.S. exchanges 12.29 billion shares changed hands compared with
the 12.08 billion average for the last 20 sessions.
(Reporting by Sinéad Carew in New York, Bansari Mayur Kamdar and
Amruta Khandekar in Bengaluru; additional reporting by Pranav
Kashyap; Editing by Maju Samuel and David Gregorio)
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