Big Tech tugs Wall Street back from record high levels

(Reuters) – Wall Street receded from record high levels on Wednesday, spooked by worries that the Delta coronavirus variant could blunt the economy’s recovery and on uncertainty about when the Federal Reserve may pull back its accommodative policies.

A trader works on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., August 10, 2021. REUTERS/Andrew Kelly

Apple and Facebook both fell more than 1% after helping push the Nasdaq to record highs in the previous session. The dips in those two Silicon Valley giants contributed more than any other companies to the S&P 500’s decline for the session.

Investors have become more cautious following Friday’s weak August payrolls data, while pressures from rising costs, despite the economy slowing, have increased concerns that the Fed could move sooner than expected to scale back massive monetary measures enacted last year to shield the economy from the coronavirus pandemic.

The S&P 500 has dipped about 0.6% from its record closing high last Thursday, and it remains up 20% year to date, buoyed by the Fed’s accommodative monetary policy.

“Investors are pulling petals from a daisy, saying, ‘The economy will grow, the economy won’t grow’,” said Sam Stovall, chief investment strategist at CFRA. “They can’t make up their minds, so they have not commitment to long-term positions.”

St. Louis Federal Reserve Bank President James Bullard told the Financial Times that the Fed should move forward with a plan to trim its pandemic stimulus program despite a slowdown in job growth.

Most of the 11 S&P 500 sector indexes fell, with materials, energy and technology among the deepest declines.

In afternoon trading, the Dow Jones Industrial Average was down 0.28% at 35,000.42 points, while the S&P 500 lost 0.22% to 4,509.91.

The Nasdaq Composite dropped 0.62% to 15,278.59.

Perrigo Company Plc jumped 8.8% after the drugmaker said it plans to buy HRA Pharma from investment firms Astorg and Goldman Sachs Asset Management in a deal valued at 1.8 billion euros ($2.13 billion).

Cryptocurrency exchange Coinbase Global Inc fell 2.2% after the U.S. securities regulator threatened to sue the firm if it goes ahead with plans to launch a crypto lending scheme.

U.S. payments giant PayPal Holdings Inc declined 1.3% after it said it would acquire Japanese buy now, pay later firm Paidy in a $2.7 billion largely cash deal.

GameStop stock dipped 1.5% ahead of quarterly results after the bell as the videogame retailer that was at the epicenter of this year’s meme-stock retail trading craze continues to struggle.

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