US Market falls on profit taking, tech leads losses

The US stock market closed down on Monday, 10 May 2021, as investors opted to book recent profit amid concerns pick-up in inflation likely to derail the record-setting rally in stocks. At the close of trade, the Dow Jones Industrial Average index declined 34.94 points, or 0.1%, to 34,743. The S&P 500 index was down 44.17 points, or 1.04%, at 4,188. The tech-heavy Nasdaq Composite Index fell 350.38 points, or 2.55%, to 13,402.

Total six out of 11 major S&P 500 sectors closed lower, with information technology, communication services, and consumer discretionary issues being notable losers, whereas shares of tilites and consumer staples were notable gainers.

 

Federal Reserve Chairman Powell and Treasury Secretary Yellen have both signaled that any inflationary pressures will just be temporary, but Wharton Professor Jeremy Siegel said on Friday that inflation could spike massively and force the Fed to change its policy stance earlier than anticipated.

Inflation worries have driven investors away from market-leading growth stocks in favour of cyclical, which stand to benefit most as the economy reopens.

Technology stocks tumbled after negative comments about several big-name companies from investment houses. Goldman Sachs has warned about the potential negative impact on the earnings of big-name tech companies if President Joe Biden's corporate tax plan were fully enacted. Google parent Alphabet (GOOGL) and Facebook (FB) posted notable losses after Citi downgraded both stocks to Neutral from Buy. Oracle (ORCL) also moved to the downside after Barclays downgraded its rating on the business software giant's stock to Equal Weight from Overweight.

Among Indian ADR, HDFC Bank fell 2.65% to $69.50, ICICI Bank fell 0.06% to $16.67, WNS Holdings fell 1.64% to $70.20, and INFOSYS fell 0.11% to $18.36. Tata Motors added 2.28% to $21.05, Wipro added 0.53% to $7.60, Dr Reddys Labs added 1.66% to $72.20, and Vedanta added 1.59% to $15.98.

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