US stocks retreat as tech shares plunge, banks add to gains

Traders work on the floor of the New York Stock Exchange (NYSE) November 29, 2016. — Reuters pic
Traders work on the floor of the New York Stock Exchange (NYSE) November 29, 2016. — Reuters pic

NEW YORK, Dec 2 — US stocks fell from near all-time highs, after equities capped their first monthly advance in four, as technology shares plunged to overshadow rallies in bank and energy shares.

The S&P 500 Index fell 0.4 per cent to 2,191.08 at 4pm in New York. The benchmark index climbed 3.4 per cent in November for its best gain in eight months amid speculation the incoming president will push through policies that boost growth in the world’s largest economy.

The Dow Jones Industrial Average added 68.35 points to 19,191.93 yesterday, while the tech-heavy Nasdaq 100 Index slid 1.6 per cent to a two-week low.

Technology shares have lagged behind during a post-election rally that’s boosted banks to the highest since February 2008 amid speculation Donald Trump’s cabinet picks signal a slackening of regulations for the financial sector.

Oil shares added to gains sparked by Opec’s intention to curb crude output. Trump’s trade policies may have the potential to harm large-cap technology providers.

The group slumped yesterday after a report that Apple Inc has started reducing orders from iPhone 7 suppliers. Semiconductor shares plunged 4.6 per cent. IBM Corp and Microsoft Corp lost at least 1.5 per cent.

“You have the potential for higher interest rates resulting from bigger deficits, and that’s causing some of the rate-sensitive areas to once again come under pressure,” said Bill Schultz, who oversees US$1.2 billion (RM5.3 billion) as chief investment officer of McQueen, Ball & Associates Inc in Bethlehem, Pennsylvania.

“On the flipside, you have another day of strength in the oil patch, and the beneficiaries from higher infrastructure spending are moving up.”

Attention will turn to today’s government payrolls data for clues on the strength of the economy and the timing for higher interest rates. A private report yesterday showed better-than-forecast figures.

Traders are pricing in a 100 per cent chance policy makers will increase rates this month, up from 68 per cent at the start of November. — Bloomberg

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