US STOCKS-Dow closes at a one-month high as investors broaden portfolios
24/06/2024 21:27
*
Fed's preferred inflation PCE data due on Friday
*
Nvidia on track for third straight declining session
*
Oil companies advance on expectations of higher demand
*
Indexes: Dow up 0.66%; S&P down 0.31%; Nasdaq down 1.09%
(Updates to 4:10pm)
By Ankika Biswas, Lisa Pauline Mattackal and Carolina Mandl
June 24 (Reuters) -
The Dow rallied on Monday to a one-month high, while the
Nasdaq tumbled over 1% as investors rotated out of AI-linked
stocks and added some laggards to their portfolios, betting on
Federal Reserve interest rate cuts this year.
The S&P 500 and Nasdaq ended lower on the rotation out
of technology stocks whose outsized gains have led this year's
rally. Still, nine of the S&P 500's 11 major industry sectors
gained ground.
Nvidia NVDA.O slid 6.68% for a third session, as
market watchers cited profit taking in the semiconductor
bellwether after last week's meteoric rise made it the world's
most valuable company.
Other chip stocks including U.S. shares of Taiwan
Semiconductor Manufacturing TSM.N , Broadcom AVGO.O , Marvell
Technology MRVL.O and Qualcomm QCOM.O dropped between 3.53%
and 5.7%, dragging the chip stocks index .SOX down 3.02%.
"The market's selling some of the winners and buying
some of the laggards here," said Jack Janasiewicz, lead
strategist at Natixis Investment Managers. "It's a little bit of
a nod to looking out over the inflation data that is coming out
on Friday, as expectations are for a pretty soft print."
Technology .SPLRCT and the consumer discretionary were
the only two decliners among the 11 S&P 500 sector indexes,
while the energy sector was the top outperformer, advancing
2.73%.
"There's been a rotation into some of the value areas of
the market like financials, energy, and utilities. Energy has
the additional benefit of a little bit of a jump in oil prices,"
said Ed Clissold, chief U.S. strategist at Ned Davis Research.
Oil prices rose on Monday spurred by
stronger fuel demand
expectations, shares of
energy and oil field services companies
rose.
The Dow Jones Industrial Average .DJI jumped and
registered a five-day winning streak. The small-caps index
Russell 2000 .RUT also hit its highest in over a week,
signaling broader market gains.
Except for Nvidia and other chip stocks, "the rest of
the market is behaving positively on the expectation that we're
still on course for a soft landing base case," said Carl
Ludwigson ,managing director at Bel Air Investment Advisors.
The biggest event on investors' radar for the week is
Friday's personal consumption expenditures (PCE) price index
report, the Fed's preferred measure of inflation, expected to
show a moderation in price pressures.
Investors still expect about two rate cuts this year,
pricing in a 61% chance of a 25-basis-point cut in September, as
per LSEG's FedWatch. The Fed's own latest projection is for one
rate cut likely in December.
San Francisco Fed President Mary Daly said she does not
believe the U.S. central bank should cut rates before
policymakers are confident inflation is headed toward 2%.
The S&P 500 .SPX lost 15.73 points, or 0.29%, to end
at 5,448.89 points, while the Nasdaq Composite
.IXIC lost 190.19 points, or 1.09%, to 17,499.17. The Dow
rose 257.99 points, or 0.66%, to 39,408.32.
Other data this week include durable goods, weekly jobless
claims and final first-quarter GDP figures, the annual Russell
index reconstitution. Some quarterly earnings reports also are
due.
On Thursday, President Joe Biden will debate Republican
rival Donald Trump in Atlanta, which could influence the outcome
of a race for the November election that opinion polls show as
neck-and-neck.
Meta Platforms META.O rose after a report the Facebook
parent has discussed integrating its generative AI model into
Apple's AAPL.O recently announced AI system for iPhones.
Apple's shares also climbed.
RXO RXO.N leapt on plans to buy United Parcel Service's
UPS.N Coyote Logistics business unit for $1.025 billion.
Advancing issues outnumbered decliners by a 2.25-to-1 ratio
on the NYSE. There were 179 new highs and 48 new lows on the
NYSE.
The S&P 500 posted 35 new 52-week highs and one new low
while the Nasdaq Composite recorded 49 new highs and 128 new
lows.
Volume on U.S. exchanges was 10.94 billion shares,
compared with the 11.92 billion average for the full session
over the last 20 trading days.
(Reporting by Ankika Biswas and Lisa Mattackal in Bengaluru,
and Carolina Mandl in New York; Editing by Maju Samuel and David
Gregorio)
((Ankika.Biswas@thomsonreuters.com;))