(Reuters) – Early gains on Wall Street fizzled out by afternoon on Monday as losses in technology and healthcare stocks overshadowed increased expectations of stimulus from central banks around the world.
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., September 9, 2019. REUTERS/Brendan McDermid
Amgen fell 3.19% after analysts raised questions about data on the company’s lung cancer drug, dragging the healthcare sector .SPXHC down 0.94%.
Lenders, however, were up on broad gains in U.S. Treasury yields on risings bets of an interest rate cut in the U.S. Federal Reserve’s September meeting.
Financial stocks .SPSY rose 1.20%, providing the biggest boost to the S&P 500, with banks .SPXBK gaining 2.62%. Technology stocks .SPLRCT fell more than 1% and were the biggest drag on the benchmark index.
“The markets are continuing last week’s positive sentiment but with a reduction in pessimism and fear,” said Scott Brown chief economist at Raymond James in St. Petersburg, Florida.
Stocks gained last week on easing U.S.-China trade negotiations and global political tensions as well as increased hopes of an interest rate cut.
Cementing those expectations, Fed Chairman Jerome Powell said late last week the central bank would “act as appropriate” to sustain economic expansion, a phrase that financial markets have read as a sign of an impending of rate cut.
Earlier on Monday, U.S. Treasury Secretary Steven Mnuchin said he did not see the threat of a recession as the Trump administration seeks to revive trade negotiations with China, adding that he expected a positive year ahead for the U.S. economy.
Energy stocks .SPNY led gains among the 11 major S&P 500 sectors with a 1.41% rise, as oil prices got a boost from the new Saudi energy minister committing to output cuts.
At 13:11 p.m. ET, the Dow Jones Industrial Average .DJI was up 20.95 points, or 0.08%, at 26,818.41, the S&P 500 was down 2.34 points, or 0.08%, at 2,976.37 and the Nasdaq Composite was down 22.49 points, or 0.28%, at 8,080.59.
Among other stocks, AT&T Inc (T.N) gained 2.61% after shareholder Elliott Management Corp disclosed a $3.2 billion stake in the company and pushed for changes.
Boeing Co (BA.N) fell 0.84% after it suspended load testing of its new widebody 777X aircraft over the weekend as media reports said a cargo door failed in a ground stress test.
Shares of Fred’s Inc (FRED.O) plunged 50.82% to a record low after the discount retailer said it filed for Chapter 11 bankruptcy protection.
Advancing issues outnumbered decliners by a 1.44-to-1 ratio on the Nasdaq.
The S&P index recorded 33 new 52-week highs and 3 new lows, while the Nasdaq recorded 50 new highs and 47 new lows.
Reporting by Uday Sampath in Bengaluru; Editing by Arun Koyyur and Saumyadeb Chakrabarty