US Stocks Close Lower as S&P 500 and Nasdaq Pull Back from Record Highs
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| US Stocks Close Lower as S&P 500 and Nasdaq Pull Back from Record Highs. |
US stock markets closed lower on Thursday as the S&P 500 and Nasdaq Composite retreated from their all-time intraday highs. Both indexes took a short pause after strong gains in the previous session, while the ongoing US government shutdown continued to weigh on investor sentiment.
The S&P 500 fell 0.28 percent to close at 6,735.11, while the Nasdaq slipped 0.08 percent to end at 23,024.63. Meanwhile, the Dow Jones Industrial Average dropped 243.36 points, or 0.52 percent, finishing the day at 46,358.42.
On Wednesday, both the S&P 500 and Nasdaq hit record levels. The S&P 500 logged gains in eight of the last nine sessions, and the Nasdaq surpassed the 23,000 mark for the first time ever. The Dow, however, stayed slightly below flat as blue-chip stocks lagged. Nvidia helped limit losses, rising more than 2 percent after CEO Jensen Huang told CNBC that computing demand has “gone up substantially” this year.
David Wagner, Head of Equities at Aptus Capital Advisors, noted that the market has been on a relentless rally since the April sell-off. “Some investors believe the stock market is overheated, calling for a short breather,” he said. “But the classic dip-buying strategy continues to dominate.”
Software giant Oracle and chipmaker Nvidia were bright spots on Thursday, with shares rising 3 percent and nearly 2 percent, respectively. Both had seen declines earlier this week following reports that Oracle’s cloud business was facing thinner margins due to challenges in leasing Nvidia chips.
“The market is trying to figure out which partnerships will deliver the best return on invested capital,” Wagner added. “You’re seeing some rotation among players that have that sustainable, circular growth theme.”
Investors were also keeping a close eye on the ongoing US government shutdown, which entered its ninth day Thursday. The Senate failed for the seventh time to pass competing funding proposals, with little sign of progress between Republicans and Democrats. Wall Street is watching to see whether the shutdown could begin to hurt the US economy — and some early signs are already appearing.
The IRS announced Wednesday that it would furlough nearly half of its employees due to the shutdown. Meanwhile, a shortage of air traffic controllers has forced the Federal Aviation Administration (FAA) to delay several US flights.
Delta Air Lines CEO Ed Bastian told CNBC that the airline has not yet seen any operational impact from the shutdown, but warned that “some effects” could start to appear if it continues for another 10 days or more. Delta shares jumped 4 percent after reporting better-than-expected earnings.
Costco was another winner of the day, with shares up 3 percent following strong September sales data. Tom Hainlin of U.S. Bank Asset Management said Delta’s and Costco’s performance reflects the resilience of American consumers in a challenging macroeconomic environment.
“You can see in real time whether there’s an inflection point in consumer behavior, and we haven’t seen it yet,” Hainlin.
