US STOCKS-S&P 500, Nasdaq close lower as traders cash in on latest megacap rally
07/06/2023 21:00
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Netflix gains after Wells Fargo PT raise
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Coinbase rebounds day after hitting seven-month low
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Indexes:
(Updates prices throughout)
By Shubham Batra, Shristi Achar A and David Carnevali
June 7 (Reuters) -
The S&P 500 and Nasdaq closed in negative territory on
Wednesday as investors took profits after a months-long megacap
stocks run and ahead of key economic and policy events next
week.
The small-cap index Russell 2000 .RUT ticked higher as
investors kept moving away from megagap and growth stocks after
their strong gains.
"Over the past week, we've seen a pretty dramatic
outperformance of small caps relative to large caps," said Paul
Baiocchi, investment firm SS&C ALPS Advisors chief ETF
strategist. "We're seeing that persist here today."
U.S. inflation data is expected to show consumer prices
eased slightly in May from the previous month but with elevated
core prices.
Weighing on stocks, the two-year US2YT=RR U.S. Treasury
yield and benchmark 10-year US10YT=RR yield increased after
the Bank of Canada raised interest rates, adding to investor
jitters about the Federal Reserve's next U.S. interest rate
decision.
Money market participants now see a 69% chance that the U.S.
central bank will skip raising interest rates in its June
meeting but will hike in July, down from nearly 77% earlier,
according to the CME's Fedwatch tool.
Recently, U.S. shares have been boosted by a megacap stocks
rally and a stronger-than-expected earnings season, with the S&P
500 .SPX up almost 20% from its October 2022 lows.
Some analysts expect profit-taking soon in big tech and
other major growth stocks.
Meanwhile, CBOE Volatility Index .VIX hit the lowest since
Feb. 14, 2020.
Wells Fargo raised the price target on Netflix NFLX.O
shares to $500 from $400, the highest on Wall Street, according
to Refinitiv. The streaming company gained on the news.
Energy index .SPNY rose after oil prices edged higher,
while the KBW Regional Banking Index .KRX hit a two-month
high.
According to preliminary data, the S&P 500 .SPX lost 16.31
points, or 0.38%, to end at 4,267.54 points, while the Nasdaq
Composite .IXIC lost 170.59 points, or 1.28%, to 13,105.83.
The Dow Jones Industrial Average .DJI rose 92.99 points, or
0.28%, to 33,666.27.
Yext Inc YEXT.K soared after the New York-based online
marketing firm raised its annual earnings forecast.
Campbell Soup CPB.N fell after the packaged food maker
posted a lower fiscal third-quarter gross margin, dented by high
commodity and freight costs.
Coinbase shares COIN.O advanced the day after they hit a
seven-month low, as the company's CEO reassured customers that
their funds were safe and blasted the U.S. Securities and
Exchange Commission over its lawsuit. On Tuesday, the SEC sued
the largest U.S. crypto exchange, accusing it of operating
illegally, without having first registered with regulator.
Cathie Wood's Ark Invest bought 419,324 shares of Coinbase
on Tuesday.
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(Reporting by Shubham Batra and Shristi Achar A in Bengaluru
Editing by Vinay Dwivedi, Richard Chang and David Gregorio)
((Shubham.Batra@thomsonreuters.com;))