S&P 500 Snaps 3-Week Winning Streak as Big Tech Runs Out of Steam
Investing.com
Published Jul 24, 2020 04:06PM ET
By Yasin Ebrahim
Investing.com – The S&P 500 broke its three-week winning streak on Friday as rising U.S. and China tensions and a stumble in tech and health care weighed on sentiment.
The S&P 500 lost 0.62%, while the Nasdaq Composite fell 0.94% and the Dow Jones Industrial Average slumped 0.68%.
Mega-cap tech - with exception of Amazon.com Inc (NASDAQ:AMZN) – struggled to find their footing as Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL), Facebook Inc (NASDAQ:FB) and Microsoft (NASDAQ:MSFT), making up about 20% of the S&P 500 index, ended lower.
A 16% drop in Intel (NASDAQ:INTC) shares exacerbated the decline in tech after the chip maker's better-than-expected results for the second quarter were overshadowed by delays in the roll out of its next-generation chips. Intel rival Advanced Micro Devices Inc (NASDAQ:AMD), however, surged 16.5% as the chipmaker is set to benefit from Intel's production woes.
Health care was also among the biggest declines as investors shunned Covid vaccine-related drug makers that have been bid up recently.
Moderna (NASDAQ:MRNA) fell 2.8% after failing to scrap a U.S. patent owned by Arbutus Biopharma (NASDAQ:ABUS) that threatens its efforts to develop mRNA-based vaccines.
Pfizer (NYSE:PFE) and Biontech Se (NASDAQ:BNTX), which are jointly developing a coronavirus vaccine, fell 1.9% and 5%, respectively. Novavax (NASDAQ:NVAX) fell 3.8% and Gilead Sciences (NASDAQ:GILD) was down 2.5%.
In financials, Goldman Sachs was in the spotlight after the bank reached a $3.9 billion settlement with Malaysia concerning the multibillion-dollar sovereign wealth fund 1Malaysia Development Bhd (1MDB) scandal.
Shares of Goldman Sachs (NYSE:GS) fell 0.75%. The bank benefited from an upgrade from JPMorgan (NYSE:JPM) to buy from neutral.
The broader market kicked off the session on the back foot as investor sentiment was soured by rising U.S. and China tensions.
China ordered the closure of a U.S. consulate in Chengdu, hitting back against the United States' move earlier this week to close a Chinese consulate in Houston.
On the earnings front, investors had to contend with mixed results that highlighted the impact of the pandemic.
Honeywell (NYSE:HON) fell 2.8% as a warning of sales headwinds offset better-than-expected earnings and revenue in the second quarter.
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Boston Beer (NYSE:SAM), meanwhile, produced blowout second-quarter results as earnings were more than double the consensus estimates, sending its shares 25.6% higher.
On the economic front, home buying activity remained as new homes in June markedly beat economist estimates.
New home sales rose by 13.8% in June to an annualized run-rate of 776,000 units, the highest level since 2007.
"The tightness in the housing market suggests significant upside for home building activity, provided demand can be sustained at current levels. We believe it can, with upside," Jefferies (NYSE:JEF) said.
Written By: Investing.com
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