US STOCKS-S&P 500, Nasdaq close lower as traders cash in on latest megacap rally
07/06/2023 21:33
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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 climbed 1.78% 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 close
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 ticked 0.12% higher on the
news.
Energy index .SPNY rose 2.65% after oil prices edged
higher, while the KBW Regional Banking Index .KRX closed at
the highest level since March 29.
The Dow Jones Industrial Average .DJI rose 91.74 points,
or 0.27%, to 33,665.02, the S&P 500 .SPX lost 16.33 points, or
0.38%, to 4,267.52 and the Nasdaq Composite .IXIC dropped
171.52 points, or 1.29%, to 13,104.90.
Yext Inc YEXT.K soared 38.44% after the New York-based
online marketing firm raised its annual earnings forecast.
Campbell Soup CPB.N fell 8.91% 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 3.20% 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.
Advancing issues outnumbered declining ones on the NYSE by a
1.58-to-1 ratio; on Nasdaq, a 1.27-to-1 ratio favored advancers.
The S&P 500 posted 22 new 52-week highs and no new lows; the
Nasdaq Composite recorded 122 new highs and 40 new lows.
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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;))