S&P 500 declines with transports; oil extends recent rally

Tech has been the best-performing sector this year, leading the S&P 500’s 10.6 per cent run in 2017. — Reuters file pic Tech has been the best-performing sector this year, leading the S&P 500’s 10.6 per cent run in 2017. — Reuters file pic NEW YORK, July 28 — The S&P 500 ended lower following a drop in technology and transportation shares yesterday, while oil prices extended their recent rally.

The S&P 500, along with the Nasdaq, reversed gains from earlier in the session, while MSCI’s 47-country All World eked out a record high.

The Dow Jones transportation average, often seen as a gauge of the US economy’s health, fell 3.1 per cent and hit its lowest point in nearly two months, while the S&P technology index was down 0.8 per cent, making it the day’s worst-performing major group. The Nasdaq biotech index was down 1.9 per cent.

Tech has been the best-performing sector this year, leading the S&P 500’s 10.6 per cent run in 2017.



“The general sentiment of the market coming into the day was that transportation stocks are telling us something that we’re not paying attention to,” said Art Hogan, chief market strategist at Wunderlich Securities in New York.

“You’ve got a general feeling a lot of good news is priced into this market,” Hogan said.

The Dow industrials set a record closing high, helped by a jump in Verizon.

The Dow Jones Industrial Average rose 85.54 points, or 0.39 per cent, to 21,796.55; the S&P 500 lost 2.41 points, or 0.10 per cent, to 2,475.42; and the Nasdaq Composite dropped 40.56 points, or 0.63 per cent, to 6,382.19.

“Biotech and tech are getting hit because they’ve been the outperformers. When people get nervous, they take money out of the outperformers first,” said Ken Polcari, director of the NYSE floor division at O’Neil Securities in New York.

The biggest one-day drop in AstraZeneca shares, following a drug study failure, dominated trading in Europe, though a handful of results helped broader indexes nudge higher. The pan-European STOXX 600 ended down 0.11 per cent.

In the US Treasury and foreign exchange markets, investors continued to evaluate the Federal Reserve’s recent statement that it is closer to paring its balance sheet.

The US said on Wednesday it expected to start winding down its massive holdings of bonds “relatively soon,” despite striking a cautious tone on low .



Many analysts and traders expect the Fed to announce its balance sheet reduction plans when its policymakers meet in September.

US Treasury prices were weighed down by government and corporate debt supply. The Treasury Department sold US$28 billion (RM119.728 billion) in seven-year notes to fair demand, the final sale of US$88 billion in coupon-bearing supply this week.

US benchmark 10-year Treasury notes fell 8/32 in price to yield 2.31 per cent, up from 2.28 per cent on Wednesday.

The rose against the euro after US data showing that new orders for key US-made capital goods unexpectedly fell in June.

The euro fell 0.4 per cent against the dollar, slipping below the US$1.17 mark. It had earlier risen to US$1.1776, its highest since 2015.

In the , a rally in US gasoline futures spurred further gains this week that came after key OPEC members pledged to reduce exports and the US government reported a sharp decline in crude inventories.

crude futures were up 52 cents to settle at US$51.49 a barrel, while US crude was up 29 cents to US$49.04. — Reuters

Source: The Malay Mail Online








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