Wall Street reverses as tech losses outweigh oil gains

By Yashaswini Swamynathan

REUTERS - The S&P 500 and the Dow Jones Industrial Average reversed course after hitting record intraday highs late Thursday morning as losses in tech stocks offset the impact of a surge in oil prices.

Oil rose more than 2 percent after data showed a surprise decline in U.S. inventories, suggesting a global oversupply may be ending.

The S&P 500 energy index jumped 0.6 percent, led by gains in Exxon and Chevron. The sector also provided the biggest boost to the broader index.

The technology sector, however, dropped 0.3 percent, largely due to losses in Nvidia, setting the Nasdaq up for its worst day of this month.

 

"What I like about this market is that (investors) seem to be a little more focused on fundamentals as opposed to looking at the volatility coming from politics," said Omar Aguilar, chief investment officer at Charles Schwab Investment Management.

U.S. stocks have been on a record-setting rally in the past two weeks after Trump said his administration would make a major tax announcement in the coming weeks.

Treasury Secretary Steven Mnuchin told CNBC on Thursday that he expected a "very significant" tax reform to be enacted by Congress' August recess.

At 11:05 a.m. ET, the Dow was down 3.61 points, or 0.02 percent, at 20,771.99, the S&P 500 was down 4.22 points, or 0.17 percent, at 2,358.6 and the Nasdaq Composite was down 41.30 points, or 0.7 percent, at 5,819.32.

Five of the 11 major S&P 500 sectors were lower, with industrials, technology and financials weighing the most. The three indexes were among the top gainers since the November U.S. presidential election.

"I wouldn't be surprised if by the end of the quarter we get some repositioning, especially in those sectors that have gained the most," Aguilar said.

A Labor Department report showed the number of Americans applying for unemployment benefit rose slightly more than expected last week, but the four-week average of claims fell to its lowest level since 1973, pointing to strengthening labor market conditions.

Shares of L Brands plunged 16.7 percent to $48.39 after the company reported weak sales at Victoria's Secret, its biggest business by revenue.

Boston Scientific lost 3.4 percent after the company recalled its Lotus Valve heart devices, citing reports of problems with the locking mechanism. Shares of rival Edwards Lifesciences rose 4 percent and were the biggest gainers on the S&P.

Declining issues outnumbered advancers on the NYSE by 1,528 to 1,256. On the Nasdaq, 1,863 issues fell and 819 advanced.

The S&P 500 index showed 47 new 52-week highs and two new lows, while the Nasdaq recorded 98 new highs and 24 new lows.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D'Souza and Saumyadeb Chakrabarty)