US close: Markets end lower as tech stocks remain at fore

By Sharecast News

Sharecast News | 12 Jun, 2017

Wall Street's main market gauges were slightly lower at the start of the week on follow-through selling in the tech space.

The Dow Jones Industrial Average finished down 0.17% at 21,235.67, the S&P 500 lost 0.1% to 2,429.39 and the Nasdaq 100 slipped 0.59% to 5,708.18.

On Friday, the Nasdaq slumped 1.8%, dragged lower by a note from Goldman Sachs which highlighted a "valuation air pocket" in the tech sector.

"Driven by the rise of megatech, momentum, as a factor, has built a valuation air pocket underneath it creating cause for pause,” Goldman Sachs analysts wrote.

“Our view is that FAAMG - Facebook, Amazon.com, Apple, Microsoft and Alphabet (Google) - a group of five stocks, not four - have been the key drivers of both the (S&P 500 and Nasdaq 100) returns year-to date."

On Monday, strategists at JP Morgan said that while superficially US cyclicals were "holding up better on the surface", that was mostly due to technology stocks.

"We note that Healthcare, Utilities and Staples are all outperformers in the US year-to-date, along with Tech, so the internal rotation is evident even there.”

There were no major data releases scheduled for Monday, with investors looking out instead to Wednesday's rate announcement from the Federal Reserve amid expectations of this year's second rate hike.

Rate-setters in Washington DC were widely expected to hike the Fed funds rate by 25 basis points to between 1.0% and 1.25%.

In corporate news, technology giant Apple was down 2.39% after Mizuho Securities cut its stance on the stock to 'neutral' from 'buy'.

Stock in another tech giant, chip-maker Nvidia, was bouncing back by 0.25%.

Dow Jones - Risers

General Electric Co. (GE) $28.94 3.58%
Chevron Corp. (CVX) $108.03 1.54%
Walt Disney Co. (DIS) $107.04 1.34%
Nike Inc. (NKE) $54.03 1.07%
Verizon Communications Inc. (VZ) $47.19 1.01%
Exxon Mobil Corp. (XOM) $82.93 0.97%
International Business Machines Corp. (IBM) $155.18 0.70%
Travelers Company Inc. (TRV) $125.67 0.35%
3M Co. (MMM) $207.41 0.22%
Johnson & Johnson (JNJ) $131.82 0.22%