S&P 500 and Nasdaq end lower after sharp drop in tech titans

S&P 500 and Nasdaq end lower after sharp drop in tech titans

The S&P 500 and Nasdaq ended lower on Monday, pulled down by Amazon, Microsoft and other recent big-name leaders of Wall Street's recent rally.

The spread of the coronavirus disease (COVID-19) in New York
FILE PHOTO: Traders wear masks as they work on the floor of the New York Stock Exchange in response to the outbreak of the coronavirus disease (COVID19) in the Manhattan borough of New York, U.S., May 27, 2020. REUTERS/Lucas Jackson

REUTERS: The S&P 500 and Nasdaq ended lower on Monday, pulled down by Amazon, Microsoft and other recent big-name leaders of Wall Street's recent rally.

The S&P 500 dipped after briefly touching its highest level since Feb. 25. The index has rebounded over 40per cent since mid-March, even as COVID-19 infections rose rapidly in Arizona, California and Texas and about 35 other states.

Stocks that outperformed in recent months, including Amazon , Microsoft , Nvidia and Facebook , ended sharply lower after gaining earlier in the day.

"The rally's been driven by a handful of names. You've had headlines about COVID and layoffs and the economy. It's finally caught up with these names everybody's been hiding in," said Michael O'Rourke, chief market strategist at JonesTrading in Stamford, Connecticut.

Shares of German biotech firm BioNTech jumped and Pfizer Inc also climbed as two of their experimental coronavirus vaccines received the U.S. FDA's "fast track" designation.

Merger news also perked up investors as chipmaker Analog Devices Inc announced a US$21 billion deal to buy rival Maxim Integrated Products Inc , sending its stock sharply higher. Analog shares fell.

PepsiCo Inc gained after it said it benefited from a surge in at-home consumption of salty snacks such as Fritos and Cheetos during lockdowns.

Investors are bracing for what could be the sharpest drop in quarterly earnings for S&P 500 firms since the financial crisis, according to IBES Refinitiv data. Results from big banks will be in focus this week.

For a graphic on S&P 500 versus financials: widest gap since GFC, click https://fingfx.thomsonreuters.com/gfx/mkt/jbyvrrwjave/SPXper cent20versusper cent20financials.png

Unofficially, the Dow Jones Industrial Average rose 11.04 points, or 0.04per cent, to 26,086.34, the S&P 500 lost 29.69 points, or 0.93per cent, to 3,155.35 and the Nasdaq Composite dropped 226.60 points, or 2.13per cent, to 10,390.84.

Recent economic data has strengthened belief that the stimulus-pumped U.S. economy is on the road to recovery, helping investors look past a recent spike in U.S. infections.

(Additional reporting by Medha Singh and Devik Jain in Bengaluru, and by Stephen Culp and Sinead Carew in New York; Editing by Marguerita Choy)

Source: Reuters

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