(Reuters) – Wall Street’s main indexes gave up early gains to trade lower on Friday, as fears over business disruptions due to another record-breaking rise in COVID-19 cases at home overtook optimism over a further stimulus for a post-pandemic economic revival.
Netflix’s shares fell 7.2% after it forecast slower-than-expected subscriber growth during the third quarter and weighed the most on the S&P 500 and the Nasdaq.
The video streaming service’s shares also pulled the communication services sector down 1.2%, the most among S&P sectors.
The Nasdaq looked set to underperform the S&P 500 for the sixth session in a row as investors rotated out of high-flying companies including Microsoft Corp and Apple Inc, which have powered the tech-heavy index to a record high last week.
Utilities and healthcare sectors rose the most among the major S&P sectors.
“These tech stocks are grossly overvalued and the inevitable rollover of big tech into more value-oriented sectors is in the very early innings. I expect a very rough patch for big tech for the rest of the year,” said David Bahnsen, chief investment officer, the Bahnsen Group, based in Newport Beach, California
At 10:43 a.m. ET, the Dow Jones Industrial Average was down 62.98 points, or 0.24%, at 26,671.73, the S&P 500 was down 3.56 points, or 0.11%, at 3,212.01. The Nasdaq Composite was down 24.83 points, or 0.24%, at 10,449.00.
BlackRock Inc, the world’s largest asset manager, rose 2.7% after reporting a jump in quarterly profit as investors poured money into its fixed-income funds and cash management services.
As the second-quarter earnings season gets underway, investors are looking for clues on the path of recovery for Corporate America. Unprecedented stimulus measures and improving economic data have helped the S&P 500 rise to within 5% of its February record high.
U.S. stocks opened higher as investors are also hoping for more fiscal support, as a program that offers additional unemployment benefits is set to expire on July 31. The U.S. Congress will return to Washington on Monday to battle over the next coronavirus aid bill.
“It’s going to be very messy over the next couple of weeks, as Republicans and Democrats go back and forth. I suspect they’re going to end up settling somewhere closer to maybe one and a half to two trillion in fiscal stimulus,” said Bahnsen.10:43
The S&P 500 and the Dow have risen so far this week after promising data on a COVID-19 vaccine helped investors look past a record-breaking increase in coronavirus cases in the United States.
Advancing issues outnumbered decliners by a 1.01-to-1 ratio on the NYSE and by a 1.09-to-1 ratio on the Nasdaq.
The S&P index recorded 24 new 52-week highs and no new low, while the Nasdaq recorded 56 new highs and five new lows.
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