Stocks on Wall Street have closed lower as investors shifted out of big technology names, while an unexpected rise in weekly US jobless claims pointed to a fragile recovery in the labour market.
Shares of Apple Inc, Tesla Inc and Facebook Inc weighed the most on both the benchmark S&P 500 and the tech-heavy Nasdaq on Thursday.
Facebook shares dropped 1.5 per cent to $US269.39 as Wall Street assessed the wider ramifications of its move to block all news content in Australia.
The Dow Jones Industrial Average fell 119.68 points, or 0.38 per cent, to 31,493.34, the S&P 500 lost 17.36 points, or 0.44 per cent, to 3,913.97 and the Nasdaq Composite dropped 100.14 points, or 0.72 per cent, to 13,865.36.
Volume on US exchanges was 13.13 billion shares.
Strong earnings, progress in the vaccination rollout and hopes of a $US1.9 trillion federal stimulus package helped US stock indexes again hit record highs at the start of the week.
But the months-long rally suggested stocks now had high valuations, said Jason Pride, chief investment officer for private wealth at Glenmede in Philadelphia.
“We are still in the cautiously bullish environment for the market on the whole,” Pride said, citing two reasons.
“We’re going to get a vaccine-induced economic recovery, that’s No. 1. The flip side of that story is the markets have largely priced that in and driven themselves to over-valued territory. Markets are going to struggle with that,” he said.
Concerns over a rising inflation outlook have pushed investors to book profits on stocks with high valuations in the S&P 500 technology and communications services sectors, which have underpinned a 76 per cent rise in the S&P 500 since its March 2020 lows.
A Labor Department report showed initial claims for state unemployment benefits rose to 861,000 last week from 848,000 the prior week, partly due to potential claims related to the temporary closure of car plants due to a global semiconductor chip shortage.
Of the 11 major S&P 500 sectors, only utilities and consumer discretionary rose, while real estate barely fell, off 0.02 per cent.
Walmart Inc slid 6.5 per cent to $US137.66 after the world’s largest retailer missed quarterly profit estimates and predicted a low-single digit rise in fiscal 2022 net sales.
Walmart has invested heavily in online advertising and healthcare businesses over the past year, using pandemic-led sales momentum to diversify beyond brick-and-mortar retail.
Marriott International Inc rose 0.5 per cent to $US131.98 after reporting a quarterly loss as the hotel chain’s bookings declined due to pandemic-induced travel restrictions.
Declining issues outnumbered advancing ones on the NYSE by a 2.30-to-1 ratio; on Nasdaq, a 2.53-to-1 ratio favoured decliners.
The S&P 500 posted 15 new 52-week highs and no new lows; the Nasdaq Composite recorded 104 new highs and 17 new lows.