WALL STREET CLOSES DOWN AS TECH SHARES SPUTTER

By The Financial District
Feb 20, 2021
2 min read

Stocks on Wall Street closed lower on Thursday (Friday, February 19, 2021, in Manila) as investors shifted out of big technology names, while an unexpected rise in weekly US jobless claims pointed to a fragile recovery in the labor market, Herbert Lash reported for Reuters.

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Shares of Apple, Tesla and Facebook weighed the most on both the benchmark S&P 500 and the tech-heavy Nasdaq. Facebook shares dropped 1.5% to $269.39 as Wall Street assessed the wider ramifications of its move to block all news content in Australia.

The Dow Jones Industrial Average fell 119.68 points, or 0.38%, to 31,493.34, the S&P 500 lost 17.36 points, or 0.44%, to 3,913.97 and the Nasdaq Composite dropped 100.14 points, or 0.72%, to 13,865.36. Volume on US exchanges was 13.13 billion shares.

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Of the 11 major S&P 500 sectors, only utilities and consumer discretionary rose, while real estate barely fell, off 0.02%. Walmart slid 6.5% to $137.66 after the world’s largest retailer missed quarterly profit estimates and predicted a low-single digit rise in fiscal 2022 net sales.

Strong earnings, progress in the vaccination rollout and hopes of a $1.9 trillion federal stimulus package helped US stock indexes again hit record highs at the start of the week. But the months-long rally suggests stocks now have high valuations, said Jason Pride, chief investment officer for private wealth at Glenmede in Philadelphia.

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“We are still in the cautiously bullish environment for the market on the whole,” Pride said, citing two reasons. “We’re going to get a vaccine-induced economic recovery, that’s No. 1. The flip side of that story is the markets have largely priced that in and driven themselves to over-valued territory.

Markets are going to struggle with that,” he said. Concerns over a rising inflation outlook have pushed investors to book profits on stocks with high valuations in the S&P 500 technology and communications services sectors, which have underpinned a 76% rise in the S&P 500 since its March 2020 lows.

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