June 15, 2017 / 5:10 PM / 3 months ago

US STOCKS-Wall St slides as tech wreck resumes

* Apple, Microsoft, Facebook drive Nasdaq, S&P lower

* Alphabet drops on Canaccord’s rating cut

* VIX, defensive S&P sectors gain

* Indexes down: Dow 0.21 pct, S&P 0.50 pct, Nasdaq 0.94 pct (Updates to early afternoon)

By Yashaswini Swamynathan and Sruthi Shankar

June 15 (Reuters) - Technology shares came under pressure yet again on Thursday, weighing on all three major Wall Street indexes, as investors fretted about stretched valuations.

The S&P 500 technology sector has risen 16.7 percent this year, far outperforming other sectors and giving investors a chance to lock in gains.

The tech-heavy Nasdaq Composite has also surged 13.7 percent, compared with the S&P 500’s 8.2 percent gain for the year.

However, fortunes turned last Friday after a drop in Apple’s shares triggered a selloff and led to the tech sector’s biggest two-day decline in nearly a year.

“The huge tech run was impressive and has come to a point where people want to take some money off the table and preserve profits,” said Andre Bakhos, managing director at Janlyn capital in Benardsville, New Jersey.

Google’s parent Alphabet dropped 1.8 percent following a Canaccord Genuity downgrade, giving investors more reasons to sell the stock.

At 12:35 p.m. ET (1635 GMT), the Dow Jones Industrial Average was down 45.14 points, or 0.21 percent, at 21,329.42, the S&P 500 was down 12.12 points, or 0.50 percent, at 2,425.8 and the Nasdaq Composite was down 58.38 points, or 0.94 percent, at 6,136.51.

Investors are also concerned about the U.S. economy’s ability to withstand a third interest rate hike later this year and the Federal Reserve’s plans to trim its balance sheet, especially after a recent set of lackluster economic data.

A Washington Post report that President Donald Trump was being investigated for possible obstruction of justice added to the jitters.

Bakhos said the development was “adding a little angst to the market and moved investors to choose a risk-off path.”

The CBOE Volatility index, or Wall Street’s “fear gauge”, hit 11.61 points - its biggest percentage gain in nearly one month.

Eight of the 11 major S&P 500 sectors were lower.

The gainers were utilities and real estate , whose slow but steady growth makes them attractive during periods of uncertainty.

Industrials pared losses to trade little changed after Boeing shares were lifted to a record high by Deutsche Bank’s price-target increase.

Shares of Caterpillar and United Technologies were also helped by Boeing’s gain.

Kroger was down 17.6 percent after the supermarket chain operator slashed its full-year profit forecast.

Nike was off 3.2 percent after the company said it would cut about 2 percent of global workforce and eliminate a quarter of its shoe styles.

Mattel dropped to an 18-month low after the toymaker cut its dividend.

Declining issues outnumbered advancers on the NYSE by 2,022 to 830. On the Nasdaq, 2,007 issues fell and 772 advanced. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Anil D‘Silva)

Our Standards:The Thomson Reuters Trust Principles.
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