Breaking News

Nasdaq falters as investors flee tech for banks

Stock MarketsNov 29, 2017 04:47PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. A view of the exterior of the Nasdaq market site in the Manhattan borough of New York City

By Lewis Krauskopf

(Reuters) - The Nasdaq posted its biggest one-day drop in more than three months on Wednesday as investors fled high-flying technology stocks and shifted to banks and other pockets of the market that could benefit from improving economic conditions, lower regulations and taxes as well as higher interest rates.

Gains in financial, industrial and healthcare stocks boosted the Dow industrials, giving the blue-chip index another record closing high, and they helped the benchmark S&P 500 index finish near flat.

The S&P tech sector (SPLRCT), which has propelled the market's record-setting rally this year, shed 2.6 percent for its biggest daily decline in over five months.

Shares of (O:AMZN), Apple (O:AAPL), Google parent Alphabet (O:GOOGL) and Facebook (O:FB) fell between 2 percent and 4 percent. Among the year's other high fliers, Netflix (O:NFLX) slid 5.5 percent and the Philadelphia semiconductor index (SOX) dropped 4.4 percent.

Financials (SPSY) rose 1.8 percent, adding to Tuesday's gains and resulting in their biggest two-day rise since just after the 2016 U.S. election of President Donald Trump. JP Morgan (N:JPM) rose 2.3 percent and Wells Fargo (N:WFC) climbed 2.0 percent.

The industrial sector (SPLRCI) added 0.9 percent, led by transportation stocks such as Southwest Airlines (N:LUV), railroad Union Pacific (N:UNP) and package delivery company UPS (N:UPS).

"We are certainly seeing a change in leadership at least for today in that we are taking profits from technology and redistributing those profits to areas that will benefit from lower taxes, less regulation, higher interest rates and kind of later stages of the economic cycle," said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.

The Dow Jones Industrial Average (DJI) rose 103.97 points, or 0.44 percent, to 23,940.68, the S&P 500 (SPX) lost 0.97 point, or 0.04 percent, to 2,626.07 and the Nasdaq Composite (IXIC) dropped 88.02 points, or 1.27 percent, to 6,824.34.

While Amazon dropped, shares of other retailers posted sharp gains, including Target (N:TGT) up 8.9 percent and Macy's (N:M) up 8.2 percent, as holiday shopping season has begun in earnest over the past week.

"There may be a little bit of a thought that Amazon isn't going to kill every retailer out there," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

"We’re seeing some transportation stocks doing better in expectation that maybe this is going to be a pretty good holiday season with consumer confidence doing well and wage growth picking up a little bit,” Nolte said.

Investors are keenly focused on tax-reform legislation in Congress, with hopes that a corporate tax cut would further fuel the record-setting rally in equities.

Congressional Republicans scrambled to reformulate their bill to satisfy lawmakers worried about how much it would expand the federal deficit, as the measure moved toward a U.S. Senate floor vote later this week.

In the latest batch of encouraging economic data, the U.S. economy grew faster than initially thought in the third quarter, notching its quickest pace of expansion in three years.

Outgoing Federal Reserve Chair Janet Yellen told congressional leaders the U.S. economy has gathered steam this year and will warrant continued interest rate increases amid a strengthened global recovery

It was Yellen's final scheduled testimony on Capitol Hill. Her nominated replacement, Jerome Powell, on Tuesday had defended plans to potentially lighten regulation of the financial sector.

In corporate news, Chipotle Mexican Grill (N:CMG) shares rose 5.6 percent after the restaurant chain said it was seeking a turnaround expert to lead the company.

About 8 billion shares changed hands in U.S. exchanges, well above the daily average of roughly 6.5 billion over the last 20 sessions.

Nasdaq falters as investors flee tech for banks

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Ilya Atomiq
Ilya Atomiq Nov 29, 2017 11:56AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Why is this picture here?
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email