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More weakness in technology stocks leaves U.S. indexes lower

The facade of the New York Stock Exchange.
The Standard & Poor’s 500 index slipped 0.1% on Thursday after wobbling between gains and losses for much of the day.
(John Minchillo / Associated Press)
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Technology and healthcare companies helped pull stocks lower on Wall Street on Thursday, driving the market indexes deeper into the red for the first week of the year.

The Standard & Poor’s 500 index slipped 0.1% after wobbling between gains and losses for much of the day. The Dow Jones industrial average also gave up an early gain, shedding 0.5%. The tech-heavy Nasdaq composite fell 0.1% a day after posting its biggest drop in nearly a year.

Weakness in Big Tech companies such as Apple was the main culprit. The iPhone maker fell 1.7%. Healthcare stocks also helped drag down the benchmark S&P 500, outweighing gains by banks, energy companies and other sectors.

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Bonds continued to climb. The yield on the 10-year Treasury rose to 1.73%, the highest level since March. It was 1.70% late Wednesday.

The selling followed a broad slide for the markets Wednesday, when the Federal Reserve indicated it was ready to raise interest rates to fight off inflation.

“Investors are continuing to readjust their holdings to reflect the expectation of a more aggressive Fed down the road,” said Sam Stovall, chief investment strategist at CFRA.

The S&P 500 fell 4.53 points to 4,696.05. The Dow slipped 170.64 points to 36,236.47. The Nasdaq composite lost 19.31 points to 15,080.87.

With COVID protocols keeping them out of rooms before checkout, hotel housekeepers say they are discovering scenes that are filthier and potentially more hazardous than anything they can remember.

Smaller company stocks bucked the broader market. The Russell 2000 index rose 12.37 points, or 0.6%, to 2,206.37.

Stocks have been choppy this week as traders reacted to the big rise in bond yields. The S&P 500 and Dow both set all-time highs Monday but have lost ground since then. The major indexes are now on pace to post weekly losses.

Investors have been closely monitoring rising inflation’s effect on consumers and businesses. They have also been watching the Fed’s plans to dial back its ultra-low interest rate policies. Minutes from the central bank’s meeting in December showed that policymakers expressed concerns that inflation, which has surged to four-decade highs, was spreading into more areas of the economy and would last longer than they previously expected.

The central bank has already said it will accelerate the reduction of its bond purchases, which have helped keep interest rates low. Investors are watching for the effects from that pullback and gauging how quickly and how often the central bank will raise its benchmark interest rate.

Wall Street has also been weighing several economic reports this week.

On Thursday, the Institute for Supply Management reported that growth in the U.S. service industry, where most Americans work, pulled back in December after expanding at a record pace the previous two months.

The Labor Department reported that the number of Americans applying for unemployment benefits rose last week but remained at historically low levels, suggesting that the job market remains strong. The agency will release its monthly jobs report Friday.

Wall Street may be bracing for a stronger-than-expected jobs report, given that payroll processor ADP’s latest monthly hiring survey, which was released Wednesday, showed that private U.S. companies hired 807,000 workers in December, or more than double the consensus forecast, according to FactSet. A strong jobs report could give the Federal Reserve more urgency to raise interest rates in order to tackle inflation.

Beyond technology companies, a mix of retailers and healthcare stocks weighed on the market Thursday. Tesla fell 2.2% and UnitedHealth Group dropped 4.1%

Banks benefited from the rise in bond yields, which allow lenders to charge more lucrative interest on loans. Citigroup gained 3.3%.

U.S. crude oil prices rose 2.1%, which helped push energy stocks higher. ConocoPhillips rose 3.8%.


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