US stocks flat as investors turn defensive
The S&P 500 ended nearly flat on Friday as gains in defensive sectors and energy offset weakness in megacap growth stocks, while investors looked toward next week's speech by Federal Reserve Chair Jerome Powell. Megacap technology-related growth stocks dipped, with Alphabet down 1.9 percent and Tesla falling 1.7 percent, as investors fretted that interest rates could stay higher for longer. The tech-heavy Nasdaq posted the biggest weekly decline of the three major indices, losing 2.6 percent. With no major catalysts driving markets, focus has shifted to Powell's speech at the Jackson Hole economic symposium next Friday for clues on the interest rate outlook as well as earnings from chip designer Nvidia on Wednesday. The S&P 500 lost 0.01 percent, to 4,370 and the Nasdaq Composite dropped 0.2 percent, to 13,291. The Dow Jones Industrial Average rose 0.07 percent, to 34,501. Defensive sectors such as consumer staples and utilities rose, with gains in firms such as retailer Walmart helping the Dow Jones Industrial Average. Among major movers of the day, Estee Lauder tumbled 3.3 percent after the cosmetics maker forecast its annual net sales and profit below Street estimates. The Nasdaq has fallen 7.2 percent in the past three weeks, its deepest three-week drop since late December. The S&P 500's three-week loss of 4.6 percent is its biggest such decline since the three weeks ending on March 10. This week's losses came after a spate of strong economic data caused investors to dial back expectations of rate cuts and drove up government bond yields. "We've long been overdue for a correction in equities, and it's clear that higher rates have now become the catalyst for that," said Michael Reynolds, vice president investment strategy at investment and wealth advisory firm Glenmede. "When the opportunity cost for capital becomes more competitive, valuations should correct on risk bearing assets, especially large cap equities which have been trading at significant premiums this year." (Reuters)_____________________________
Last updated: 2023-08-19 HKT 09:20 