Nasdaq ends lower for second day as Big Tech loses ground

A trader works on the floor at the New York Stock Exchange in Manhattan, New York August 20, 2021. — Reuters pic
A trader works on the floor at the New York Stock Exchange in Manhattan, New York August 20, 2021. — Reuters pic

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WASHINGTON, Nov 24 — The Nasdaq ended lower for a second straight session on Tuesday, while much of the rest of Wall Street was mixed, as rising Treasury yields prompted investors to sell Tesla and other Big Tech names.

The S&P 500 growth index dipped and the value index climbed as investors sold stocks that are sensitive to higher interest rates and bought stocks in sectors such as energy and financials.

Treasury yields extended gains as investors ramped up expectations of interest rate hikes next year after Jerome Powell was nominated by President Joe Biden as fed chair for a second term.

Tesla and Microsoft fell for much of the session, and the companies were among the biggest drags on the S&P 500 and the Nasdaq.

“The market is being whipsawed by a holiday shortened week, and it’s taking its cue from the recent uptick in interest rates, giving investors additional reasons to take profits in an overvalued market,” said Sam Stovall, chief investment strategist of CFRA Research in New York.

With banks benefiting from higher interest rates, the S&P 500 banks index jumped, with Goldman Sachs, JPMorgan and Bank of America all rallying.

The S&P 500 energy index also rallied and was the best-performing sector. Oil prices rose to a one-week high after a move by the United States and other consumer nations to release tens of millions of barrels of oil from reserves to try to cool the market fell short of some expectations.

An IHS Markit survey showed US business activity slowed moderately in November amid labor shortages and raw material delays, but remained comfortably in expansion territory on strength in the manufacturing sector.

Unofficially, the Dow Jones Industrial Average rose 0.54 per cent to end at 35,813.28 points, while the S&P 500 gained 0.17 per cent to 4,690.69.

The Nasdaq Composite dropped 0.5 per cent to 15,775.14.

The CBOE volatility index briefly rose to a more than one-month high earlier on Tuesday.

The US stock market will be closed on Thursday for the Thanksgiving holiday, and it finishes early on Friday.

Zoom Video Communications Inc slumped 17 per cent after its third-quarter revenue growth rate slowed as demand for its video-conferencing tools eased from pandemic-fueled heights last year.

Best Buy Co Inc slid after the electronics retailer forecast fourth-quarter comparable sales below expectations due to supply chain issues.

Chipmakers Micron Technology and Western Digital Corp rose after Mizuho Bank upgraded the stocks to “buy” from “neutral”. — Reuters

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