NEW YORK, Feb 9 ― US stocks ended down yesterday, paring most of the previous session's strong gains, with tech-focused shares leading the way lower.
Alphabet Inc was the biggest drag on the S&P 500 and Nasdaq. Its shares sank 7.7 per cent after its new AI chatbot Bard delivered an incorrect answer in an online advertisement.
Adding to the cautious mood, Federal Reserve officials yesterday said more interest rate rises are in the cards as the US central bank moves ahead with efforts to control inflation. None hinted though that January's strong jobs report could drive more aggressive policy actions.
Fed Governor Christopher Waller said inflation seems poised to continue slowing this year but the US central bank's battle to reach its 2 per cent target “might be a long fight” with monetary policy kept tighter for longer than anticipated.
Stocks rallied on Tuesday following Fed Chair Jerome Powell's session before the Economic Club of Washington, where he said interest rates might need to move higher than expected if the US economy remained strong, but said he felt a process of “disinflation” is under way.
“After this kind of run and a move to a valuation certainly in the richer camp, you need to have more evidence to keep the market climbing higher,” said Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina.
The Nasdaq remains up about 14 per cent for the year to date.
The Dow Jones Industrial Average fell 207.68 points, or 0.61 per cent, to 33,949.01, the S&P 500 lost 46.14 points, or 1.11 per cent, to 4,117.86 and the Nasdaq Composite dropped 203.27 points, or 1.68 per cent, to 11,910.52.
All of the major S&P 500 sectors ended lower on the day, with communication services falling 4.1 per cent and technology down 1.3 per cent. The utilities lost 1.7 per cent.
Investors have been concerned about how aggressive the Fed's actions may be this year following the surprisingly strong US jobs report Friday.
They have also been concerned about mixed reports from US companies this earnings season. With results in from more than half of the S&P 500 companies, earnings still are expected to have declined year-over-year in the fourth quarter of 2022, according to IBES data from Refinitiv.
After the closing bell, shares of entertainment company Walt Disney were up 1.6 per cent following the release of its quarterly results. The stock ended the regular session up 0.1 per cent.
Investors also were digesting comments from President Joe Biden's State of the Union address late Tuesday, when he supported calls to tax corporate share buybacks.
CVS Health Corp ended the session up 3.5 per cent after its US$9.5 billion (RM40.8 billion) cash buyout offer for Oak Street Health Inc Oak Street Health shares rose 4.6 per cent.
Volume on US exchanges was 10.62 billion shares, compared with the 11.93 billion average for the full session over the last 20 trading days.
Declining issues outnumbered advancing ones on the NYSE by a 2.07-to-1 ratio; on Nasdaq, a 2.21-to-1 ratio favoured decliners.
The S&P 500 posted 11 new 52-week highs and two new lows; the Nasdaq Composite recorded 81 new highs and 35 new lows. ― Reuters
