US STOCKS-Wall Street slips as investors eye Russia, Fed hikes, quarter-end

PacWest Bancorp

26/06/2023 21:56

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        * 
      Pfizer shares fall as co to scrap obesity drug
    

        * 
      Tesla, Alphabet shares slide after brokerage downgrades
    

        * 
      Lucid up after agreement with Aston Martin 
    

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      Indexes down: Dow 0.04%, S&P 0.45%, Nasdaq 1.16%
    

  
 (Updated at 1600 P.M. ET/ 2000 GMT)
    By Sinéad Carew, Sruthi Shankar and Johann M  Cherian
       June 26 (Reuters) - U.S. stocks closed lower on Monday,
as investors were wary of betting on riskier assets before
seeing the outcome of Russia's aborted weekend mutiny.
    The rebellion by Russian mercenaries raised questions about
President Vladimir Putin's future. While Putin on Monday thanked
mercenary fighters and commanders who had stood down to avoid
bloodshed, the U.S. State Department said the situation in
Russia remained dynamic.
    Growth stocks were among the biggest weights on the main
indexes, with Meta Platforms Inc  META.O , Alphabet Inc
 GOOGL.O  and Tesla Inc  TSLA.O  all falling sharply.
    Last week, U.S. stocks sputtered after a recent rally, with
the tech-heavy Nasdaq snapping its eight-week winning streak
after Federal Reserve Chair Jerome Powell signaled there could
be more interest rate hikes ahead.
    "It doesn't feel like the all clear has sounded yet," said
Carol Schleif, chief investment officer at BMO family
office in Minneapolis, referring to Russia. "Nobody knows what
the ultimate power structure in Russia's going to look like." 
    "Traders are having a tough time today figuring out if they
want to be offensive or defensive so they've got a foot in both
camps. They don't know which way the market's going to swing,"
she said.
    Adding to uncertainty was the start of the second quarter's
final week on Monday, weeks ahead of the financial reporting
season. This prompted profit-taking in growth stocks that had
advanced sharply so far this year, Schleif said. 
    Investors also checked out underdogs for the year-to-date
such as value stocks and small caps, said Chris Zaccarelli,
chief investment officer at Independent Advisor Alliance,
Charlotte, North Carolina. 
    "Out of favor themes for 2023 are working for today. Maybe
in the absence of a real risk on or risk off day you go bargain
hunting," Zaccarelli said.
    The Dow Jones Industrial Average  .DJI  fell 12.72 points,
or 0.04%, to 33,714.71; the S&P 500  .SPX  lost 19.51 points, or
0.45%, at 4,328.82; and the Nasdaq Composite  .IXIC  dropped
156.74 points, or 1.16%, to 13,335.78.
    Leading the benchmark's industry index gainers was the
energy sector  .SPNY , which rallied 2.2% as oil prices rose
while investors balanced concerns about global demand growth
against upcoming supply disruptions that could worsen with
political instability in Russia.  O/R 
    A slew of economic data including a key inflation gauge,
durable goods and University of Michigan's consumer sentiment
index is expected this week, as well as a speech from Powell
which could throw light on the Fed's rate hike plans.
    Most policymakers see at least two more quarter-point rate
increases by year-end, though traders are betting on just one
hike in July, according to CMEGroup's Fedwatch tool.
    Among single stocks, Pfizer Inc  PFE.N  fell 3.7% after the
drugmaker said it was discontinuing the development of an
experimental obesity and diabetes drug due to elevated liver
enzymes in patients in clinical studies.
    Alphabet  GOOGL.O  fell 3.3% after UBS downgraded the stock
to "neutral," while Tesla  TSLA.O  sank 6% after Goldman Sachs
cut the electric car maker's rating to "neutral."
    Lucid Group  LCID.O  rose 1.5% after entering into an
agreement with UK's Aston Martin  AML.L  that will give the
electric vehicle maker a 3.7% stake in the company.
    PacWest  PACW.O  climbed 4% after private-equity firm Ares
Management  ARES.N  said it had acquired a $3.5 billion
specialty finance loan portfolio from the lender.
    But Carnival  CCL.N  slumped 7.6% after the cruise operator
forecast third-quarter earnings below Wall Street expectations.
    Advancing issues outnumbered decliners on the NYSE by a
1.91-to-1 ratio; on Nasdaq, a 1.15-to-1 ratio favored decliners.
    The S&P 500 posted 18 new 52-week highs and two new lows;
the Nasdaq Composite recorded 53 new highs and 154 new lows.
    On U.S. exchanges 9.28 billion shares changed hands compared
with the 11.62 billion average for the last 20 sessions.        

 (Reporting by Sinéad Carew in New York, Sruthi Shankar and
Johann M Cherian in Bengaluru; Editing by Shinjini Ganguli and
Richard Chang)
 ((sinead.carew@thomsonreuters.com))