Banks, energy stocks drag Wall Street lower; Joe Biden's presser in focus

Wall Street's main indexes fell on Thursday, dragged down by economically sensitive bank and energy stocks and shrugging off data showing the labor market continued to limp out of a coronavirus-induced recession.

The Labor Department's weekly jobless claims report, the most timely indicator of economic health, showed fewer-than-expected Americans filed new claims for state unemployment benefits last week.

Ten of the 11 S&P sectors fell in early trading with energy, industrials and financials stocks, which recently came into favor on recovery hopes, declining the most.

"The entire market is sort of shortsighted, focused more on the recent run and completely forgetting about the improving outlook," said Robert Pavlik, senior portfolio manager at Dakota Wealth in New York.

The technology-heavy Nasdaq Composite has fallen in March after four straight months of gains as rosy economic projections lifted demand for undervalued cyclical stocks, but also raised fears of higher inflation and a potential tax hike.

In testimonies to Congress this week, Federal Reserve Chair Jerome Powell expressed optimism about a strong U.S. economic rebound, while Treasury Secretary Janet Yellen said future tax hikes will be needed to pay for public investments.

President Joe Biden is expected to lay out a new goal for U.S. vaccinations against COVID-19 at his first formal White House news conference beginning at 1:15 p.m. ET (1715 GMT). Next week, he is also set to unveil a multitrillion-dollar infrastructure plan in Pittsburgh.

"It's a tale of two different markets at this point and it depends on what the market wants to focus on," said Faron Daugs, founder and chief executive officer of Harrison Wallace Financial Group.

"Does it want to focus on stimulus, increased vaccinations and re-opening economies or on potential taxes, increased regulation potentially in certain sectors, extremely high spending and inflation."

Heavyweight tech stocks Facebook Inc, Google parent Alphabet Inc and Twitter Inc were subdued ahead of their chief executives' testimony before Congress about extremism and misinformation on their services.

At 9:57 a.m. ET, the Dow Jones Industrial Average was down 176.61 points, or 0.54%, at 32,243.45, the S&P 500 was down 13.58 points, or 0.35%, at 3,875.56, and the Nasdaq Composite was down 45.37 points, or 0.35%, at 12,916.52.

Shares of Nike Inc fell 4.8% as the sporting goods giant faced a Chinese social media backlash over its comments about reports of forced labor in Xinjiang.

Darden Restaurants Inc added 4.1% after it announced new share buyback plan and forecast upbeat fourth-quarter revenue and profit.

Market participants also warned of higher volatility ahead of the quarter-end portfolio relabancing by institutional investors.

Declining issues outnumbered advancers 3.75-to-1 on the NYSE and 3.39-to-1 on the Nasdaq.

The S&P index recorded one new 52-week high and no new low, while the Nasdaq recorded 11 new highs and 107 new lows.

 

(Reporting by Devik Jain in Bengaluru; Editing by Arun Koyyur and Maju Samuel)