Stock Markets

Tech rally ebbs, leaves Wall Street adrift


A rally in tech shares has powered US stock indices to record highs but it may have run out of steam (Daniel ROLAND)

A rally in tech shares has powered US stock indices to record highs but it may have run out of steam (Daniel ROLAND)

The tech rally that drove Wall Street to record highs appeared out of steam Friday as US markets finished mixed, with European markets hit by disappointing data.

The Dow Jones Industrial Average finished less than 0.1 percent higher, while the S&P 500 and the Nasdaq both fell.

Shares in AI processor manufacturer Nvidia, largely responsible for driving the equity rally, retreated 3.2 percent after having tumbled 3.5 percent on Thursday as profit-taking set in.

“I think that because of Juneteenth, you have a lot of people who are leaving to go on vacation early,” Sam Stovall from the financial intelligence firm CFRA told AFP, referring to Wednesday’s US federal holiday.

Stovall predicted stocks could see another decline of five percent or more.

“At the same time, I’m not calling for a new bear market, so don’t let your emotions be your portfolio’s worst enemy,” he said.

In Washington, the federal government announced it had recouped nearly $557 million from the sale of stock options it acquired in several airlines in 2020, when it stepped in to support them during the Covid-19 pandemic.

And fresh data published earlier Friday showed that existing home sales fell by 0.7 percent in May from a month earlier, while prices reached a record high.

– Britvic squashes takeover approach –

On the corporate front, British soft drinks manufacturer Britvic fizzed nearly eight percent higher following news that it has rejected a takeover approach worth £3.1 billion ($3.9 billion) from Danish beer giant Carlsberg, arguing it significantly undervalued the maker of the fruit drink Robinsons squash.

With focus on European political uncertainty ahead of a French snap election, data Friday showed growth of business activity in the eurozone slowed down in June after the manufacturing sector posted its biggest decline in six months.

The HCOB Flash Eurozone purchasing managers’ index published by S&P Global recorded a figure of 50.8, down from 52.2 in May and its lowest level in three months.

A PMI reading above 50 indicates growth, while below 50 shows contraction.

“There wasn’t a single reading that managed to beat expectations or that came in above last month’s numbers,” noted David Morrison, senior market analyst at Trade Nation.

Shares in Paris closed the day down 0.6 percent, while Frankfurt shed 0.5 percent.

In the UK, the private sector grew at its slowest rate for seven months in June, as goods and services inflation remained stubbornly high and firms put spending decisions on hold until after the general election on July 4.

London’s blue-chip FTSE 100 stock index slid 0.4 percent.

Asian traders tracked Thursday’s weak performance on Wall Street, with Tokyo, Hong Kong and Shanghai all down.

– Key figures around 2030 GMT –

New York – Dow: UP 0.1 percent at 39,150.33 points (close)

New York – S&P 500: DOWN 0.1 percent at 5,464.62 (close)

New York – Nasdaq Composite: DOWN less than 0.1 percent at 17,689.36 (close)

London – FTSE 100: DOWN 0.4 percent at 8,237.72 (close)

Paris – CAC 40: DOWN 0.6 percent at 7,628.57 (close)

Frankfurt – DAX: DOWN 0.5 percent at 18,163.52 (close)

EURO STOXX 50: DOWN 0.8 percent at 4,907.30 (close)

Tokyo – Nikkei 225: DOWN 0.1 percent at 38,596.47 (close)

Hong Kong – Hang Seng Index: DOWN 1.7 percent at 18,028.52 (close)

Shanghai – Composite: DOWN 0.2 percent at 2,998.14 (close)

Euro/dollar: DOWN at $1.0697 from $1.0705 on Thursday

Euro/pound: DOWN at 84.53 pence from 84.56 pence

Dollar/yen: UP at 159.61 yen from 158.91 yen

Pound/dollar: DOWN at $1.2651 from $1.2657

West Texas Intermediate: DOWN 0.7 percent at $80.73 per barrel

Brent North Sea Crude: DOWN 0.5 percent at $85.24 per barrel

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