US stocks pare earlier losses on tech strength
Nasdaq 100 rose following a 4.4% decline from Wednesday. Trading was heavy with volume surging roughly 60% above the average for this time over the past 30 days
New York: US stocks fell for a sixth day, extending the longest losing streak of Donald Trump’s presidency, as energy and utility shares plunged, offsetting a rally in tech. The dollar fell with oil, Treasuries were flat and gold posted its biggest gain in more than two years.
The S&P 500 Index was lower but clawed back from an earlier 1.4% decline. The benchmark has tumbled more than 5% in the past six sessions. The tech-heavy Nasdaq 100 rose following a 4.4% decline from Wednesday. Trading was heavy with volume surging roughly 60% above the average for this time over the past 30 days.
“We’re in a change in the markets because of the huge interest rate move, so the market is trying to figure out what to do next,” said Joe “JJ” Kinahan, chief market strategist at TD Ameritrade. “This is about a shifting of the sands and what’s next.”
In addition to energy, biotech and insurance weighed on the market, while media companies and software makers were among the few bright spots. The Cboe Volatility Index declined but remained close to the highest level since April.
“Volatility is back and it may require more active strategies on the part of investors to pursue their long-term goals,” John Lynch, chief investment strategist for LPL Financial wrote in a note to clients Thursday. “Volatility is also not to be feared, but embraced, as varying data points will cause bouts of market anxiety. But remember that fundamentals are still strong.”
Earlier, Asian and European equities plunged as Wednesday’s market rout extended. China’s Shanghai Composite gauge closed down more than 5% and Taiwan’s technology-heavy benchmark plummeted more than 6%. Europe’s main equity index fell to the lowest since early 2017. The euro and the pound both advanced.
Investors seeking to pinpoint the cause of the current rout in equities have no shortage of culprits: US companies are increasingly fretting the impact of the burgeoning trade war, while the same issue prompted the International Monetary Fund to dial down global growth expectations. In the tech sector, which was a key driver of the rally that pushed American equities to a record just a month ago, expensive-looking companies have been roiled by a hacking scandal.
Against this backdrop, the Federal Reserve has been trimming its balance sheet and raising interest rates, provoking the ire of an unpredictable American president and helping force a repricing of riskier assets.
“What you’re seeing right now is a bit of a panic -- we wouldn’t say this looks like the end of the cycle,” said William Hobbs, head of investment strategy at Barclays Investment Solutions in London. “You’ve got to try to keep the skin in the game for as long as possible because it’s an incredibly profitable period of the cycle to be invested through if you can keep your nerve.”
Elsewhere, West Texas Intermediate crude sank below $72 a barrel amid a broad decline in commodities as OPEC cut estimates for demand. Precious metals gained with gold. A Bloomberg index of cryptocurrencies dropped as much as 11%.
This story has been published from a wire agency feed without modifications to the text.
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