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US stocks end mostly lower on valuation worries

US stocks end mostly lower on valuation worries

FILE PHOTO: The Wall Street sign is pictured at the New York Stock Exchange (NYSE) in the Manhattan borough of New York City. REUTERS/Carlo Allegri

NEW YORK: The Dow and S&P 500 both fell on Wednesday (Jun 17) as markets monitored increased coronavirus cases amid worries US stocks are overvalued.

The Dow Jones Industrial Average finished at 26,119.61, down 0.65 per cent.

The broad-based S&P 500 lost 0.36 per cent at 3,113.49, while the tech-rich Nasdaq Composite Index added 0.15 per cent at 9,910.53.

The lackluster session came after Tuesday's rally in which major indices gained around two percent following surprisingly good retail sales data and a positive clinical study of a coronavirus treatment.

But investors have become skeptical of the market's buoyancy, weighing a still-weak economic picture against continued pledges for additional support from the Federal Reserve that are reassuring but also underscore the vulnerability of the economy, said Briefing.com analyst Patrick O'Hare.

The "market has made a big run in a short amount of time in the face of a really tough economic climate," O'Hare said. "The market is due for a cooling-off period."

O'Hare said a catalyst for late selling was an interview with investor Jeremy Grantham who warned on CNBC that the US is forming a stock bubble.

Investors are also monitoring disturbing coronavirus trends in several US states, including Florida and Texas, as well as a new outbreak in China and rising deaths in Brazil and India.

Among individual companies, Oracle dropped 5.6 per cent as it reported a fall in quarterly revenues due in part to a decline in businesses from sectors that have suffered during the pandemic, including hospitality and retail.

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