Dow and S&P 500 slip as Wall Road heads for fourth straight weekly loss
The Fearless Girl statue is seen outside the New York Stock Exchange (NYSE) in New York City, New York, U.S., June 11, 2020.
Brendan McDermid | Reuters
The Dow Jones Industrial Average and S&P 500 opened lower on Friday as Wall Street headed for its fourth consecutive week of losses.
For the week, the Dow entered Friday’s session down 3% while the S&P 500 has lost 2.2%. The Nasdaq Composite is down 1.1% week to date.
The “sell-off has stabilized a bit over the last few days, but there are still no real signs of strength,” said Mark Newton, managing member at Newton Advisors, in a note. “Thus, the trend remains bearish and not much to bet on a rebound.”
Wall Street was coming off a choppy session in which the major averages eked out small gains as major tech shares saw broad gains. That outperformance for the tech-heavy index is a reversal from earlier during this market pullback.
The major averages have had a tough month, with the S&P 500 falling more than 7% in September. The Dow has dropped 5.7% over that time period and the Nasdaq is down 9.4% month to date.
Much of September’s losses have been concentrated in mega-cap tech stocks, which carry a heavy weight in the indexes. Shares of Apple — the largest publicly traded company in the U.S. by market cap — have dropped more than 19% this month. Microsoft, Alphabet, Netflix, Amazon and Facebook are all down at least 9.9% over that time period.
Russ Koesterich, managing director and portfolio manager at BlackRock, said on CNBC’s “Closing Bell” that his team took profits in some high-flying tech stocks at the end of August and then were buying more cyclical stocks during the recent drop for the market.
“What we’ve been trying to do in recent weeks is take the cyclical exposure up a little bit … it’s not that we think tech is going to roll over. We still like the themes. But on a shorter-term tactical basis, we’re comfortable with the economy, we think we’re going to continue to see improvement, and we’re looking for names that are levered to that improvement,” Koesterich said.
The state of the economic recovery has become a hot topic in recent weeks on Wall Street, especially after the death of Supreme Court Justice Ruth Bader Ginsburg led many strategists to downgrade the chances for another relief package before the election. On Thursday, Goldman Sachs cut its fourth-quarter projection for gross domestic product growth to 3% on an annualized basis, down from 6%.
House Democrats are preparing a $2.4 trillion relief package that they could vote on as soon as next week, a source familiar with the plans told CNBC. The bill would include enhanced unemployment benefits and aid to airlines, but the overall price tag remains well above what Republican leaders have said they are willing to spend.
—CNBC’s Jacob Pramuk contributed to this story.
CORRECTION: A previous headline for this report was updated to note that Dow futures were higher, rather than the Dow Jones Industrial Average itself.