By Yasin Ebrahim
Investing.com – The S&P 500 turned negative as big tech eased from session highs pared and stocks tied to the progress of the economy were ditched despite upbeat labor market data suggesting the recovery remained intact.
The S&P 500 fell 0.24% as it struggled to hold gains in a bid to close above the Feb.19 record high of 3,386.15, having advanced to a session high of 3,387. The Dow Jones Industrial Average fell 0.36%, or 100 points, while the Nasdaq Composite added 0.29%.
The Labor Department reported that 963,000 Americans filed initial claims for unemployment insurance through Aug. 8, down from 1.2 million a week earlier.
This was the first time since March that claims were below 1 million, adding to investor optimism that a broader economic recovery remains on solid footing despite a lack of progress on Capitol Hill on a new stimulus plan.
“This week's claims data is the first full week of claims after the August 1 expiration of the enhanced $600 per week benefit provided by the CARES Act,” Jefferies (NYSE:JEF) said. “The data of the past two weeks will not help the arguments of lawmakers fighting to extend the expired benefits.”
Stimulus talks among U.S. lawmakers have hit a dead end as Democrats and Republicans struggle to resolve their difference over the size of the next stimulus bill.
The Trump administration last week rejected an offer by House Speaker Nancy Pelosi on a reduced $2 trillion aid bill.
The stalled talks have prompted investors to pull their bullish bets on value stocks - those tied to the progress of the economy. While the bid in growth stocks faded as the Fab 5 gave up some gains.
Microsoft (NASDAQ:MSFT) turned negative, while Apple (NASDAQ:AAPL), Amazon.com (NASDAQ:AMZN), Facebook (NASDAQ:FB), and Alphabet (NASDAQ:GOOGL) eased from session highs.
Apple was up more than 1% on news the tech giant is set to launch a range of service bundles in October that could also rival services to compete with Peloton Interactive (NASDAQ:PTON).
Energy stocks were pressured by a fall in oil prices as worries about demand resurfaced.
The International Energy Agency slashed its oil demand forecast for the year, by 8.1 million barrels per day (bpd), citing reduced air travel.
On the earnings front, Cisco Systems (NASDAQ:CSCO) reported weaker guidance that offset better-than-expected quarterly results, sending its shares down nearly 12%.
LYFT (NASDAQ:LYFT) fell nearly 5% after reporting second-quarter revenue fell 61% as the pandemic brought its ride-sharing business to a halt
“Lyft delivered 2Q results in-line with our expectations and with consensus, but July (and early August) trends are pointing to 3Q results below current consensus,” Wedbush warned in a note as it cut its price target on the stock to $37 from $48.