Tech stocks drag S&P, Nasdaq; Boeing lifts Dow

By Sweta Singh and Ankur Banerjee

(Reuters) – The S&P and the Nasdaq were trading lower on Monday morning as tech stocks weighed on the indexes, while the Dow touched a record high, boosted by Boeing Co (BA.N).

Facebook (FB.O), Google parent Alphabet (GOOGL.O) and Netflix (NFLX.O), and Amazon (AMZN.O), part of the high-flying “FANG” stocks, were all lower.

“We’ve been in a little bit of pull-back on some of the tech stocks for the last few days. I think it’s just a matter of the fact that they have had a very strong run,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

“The bull market is sort of broadening out and people are taking a few profits off the table on some these stocks that have done exceedingly well.”

Shares of Boeing were up 2 percent, making it the top boost to the Dow, after J.P. Morgan analysts raised price target.

Investors have been counting on earnings to support the relatively high valuations for equities, with the S&P 500 trading at about 18 times earnings estimates for the next 12 months, above its long-term average of 15 times.

Of the 289 S&P 500 companies that reported results until Friday, 73 percent of them beat analyst expectations. This is above the 71 percent average over the past four quarters, according to Thomson Reuters I/B/E/S.

Apple Inc (AAPL.O), a part of the Dow, is expected to report quarterly results after market close on Tuesday and its performance may hold the sway over tech stocks this week.

At 10:49 a.m. ET (1449 GMT) the Dow Jones industrial average (.DJI) was up 63.54 points, or 0.29 percent, at 21,893.85, the S&P 500 (.SPX) was down 1.38 points, or 0.055823 percent, at 2,470.72 and the Nasdaq Composite (.IXIC) was down 21.78 points, or 0.34 percent, at 6,352.90.

6 of the 11 major S&P sectors were lower, with the information technology’s (.SPLRCT) 2.3 percent decline, making it the biggest drag.

On data front, contracts to buy previously owned homes rebounded in June after three straight monthly declines.

The National Association of Realtors said its Pending Home Sales Index, based on contracts signed last month, jumped 1.5 percent to a reading of 110.2.

The Federal Reserve of Dallas will release its monthly manufacturing index for July at around 10:30 a.m. ET.

Oil prices rose on Monday, putting July was on track to become the strongest month for the commodity this year.

Scripps Network (SNI.O) was up 1.23 percent at $87.98 premarket after Discovery Communications (DISCA.O) said it would buy the media company for $14.6 billion.

Charter Communications Inc shares (CHTR.O) were up 4.3 percent at $386.13 after the U.S. cable operator said on Sunday it was not interested in buying wireless carrier Sprint Corp (S.N).

Declining issues outnumbered advancers on the NYSE by 1,519 to 1,200, for a 1.27-to-1 ratio on the downside. On the Nasdaq, 1,663 issues fell and 994 advanced for a 1.67-to-1 ratio favoring decliners.

(Reporting by Ankur Banerjee, Sweta Singh, and Sruthi Shankar in Bengaluru; Editing by Arun Koyyur)

Leave a Reply

Your email address will not be published. Required fields are marked *


15 + fifteen =