The S&P 500 dropped on Thursday, pulled lower by Microsoft Corp and Apple Inc, as elevated levels of unemployment claims heightened concerns about the economic toll from rising coronavirus cases. The TSX also came under pressure from the technology sector, as shares of Canada’s e-commerce darling Shopify dropped 3.07%.
And the tech sector continued to stumble after markets closed, with Netflix tumbling 10% in extended trade after the streaming video service’s quarterly report. Netflix forecast new subscribers for the third quarter that was way below Street expectations.
U.S. retail sales increased more than expected in June, but a resurgence in new COVID-19 cases is undercutting the budding recovery, keeping 32 million Americans on unemployment benefits.
A jump in cases of the virus has forced California and other states to shut down again, sparking fears of more business damage and slowing the pace of a Wall Street rally. The S&P 500 is about 5% below its February record high.
“The economic data shows there is still a challenge going forward,” said Willie Delwiche, an investment strategist at Baird in Milwaukee. “Congress better get its act together and pass another fiscal stimulus.”
The S&P real estate and technology indexes each lost more than 1%, more than any others.
Apple declined 1.2% and Microsoft lost 2%, each weighing more than any other company on the S&P 500.
The S&P 500 has exceeded the Nasdaq by nearly 3 percentage points over the past week, its greatest five-day outperformance over the Nasdaq since late March, reflecting a shift away from Amazon.com, Microsoft and other major technology companies that have led Wall Street’s gains in recent months.
“This is an early indication of good signs that money is now flowing away from completely overbought Nasdaq into those names that will bode well when the economy starts finding more of a solid footing,” said Andrew Smith, chief investment strategist at Dallas, Texas-based Delos Capital Advisors.
Twitter Inc fell 1.1% after hackers accessed its internal systems to hijack some of the platform’s top voices, including U.S. presidential candidate Joe Biden, reality TV star Kim Kardashian West, former U.S. President Barack Obama and billionaire Elon Musk and used them to solicit digital currency.
The Dow Jones Industrial Average fell 0.5% to end at 26,734.71 points, while the S&P 500 lost 0.34% to 3,215.57.
The Nasdaq Composite dropped 0.73%, to 10,473.83.
The S&P/TSX Composite Index fell 38.83 points, or 0.24%, to 16,024.50. Some recent high flyers in addition to Shopify suffered damage, with Ballard Power Systems falling 6.31% and GoodFood Market down 4.50%.
In the U.S., rounding up earnings reports of big banks, Bank of America Corp fell 2.7% after its second-quarter profit more than halved, while Morgan Stanley rose 2.5% after posting a record quarterly profit.
American Airlines tumbled 7.4% after it sent 25,000 notices of potential furloughs to frontline workers and warned that demand for air travel is slowing again.
Tesla Inc declined nearly 3% after its vehicle registrations nearly halved in the U.S. state of California during the second quarter, according to data from a marketing research firm.
Reuters, Globe staff
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.