* The decline of large technology-related companies is pressing Nasdaq, S&P 500
* Walmart is slipping as tepid outlook overshadows optimistic Q4 sales
* Facebook shares have escaped the news-extinguishing movement in Australia (add market closing at 16:00)
NEW YORK, Feb. 18 (Reuters) – Wall Street shares fell on Thursday as investors gave up big names in technology, while an unexpected rise in weekly U.S. jobless claims indicated a fragile recovery in the market work.
Shares of Apple Inc., Microsoft Corp., Tesla Inc. and Alphabet Inc. fell between 0.5% and 1.2%, weighing on both the benchmark S&P 500 and the tech Nasdaq.
Facebook Inc.’s shares declined as Wall Street assessed the broader ramifications of its action to block all news content in Australia.
Unofficially, the Dow Jones industrial average fell 118.7 points, or 0.38%, to 31,494.32, the S&P 500 lost 17.3 points, or 0.44%, to 3,914.03, and the Nasdaq Composite decreased by 100.14 points, or 0.72%, to 13,865.36.
Strong gains, progress in implementing vaccination and hopes for a $ 1.9 trillion federal stimulus package helped U.S. stock indexes hit record highs again earlier this week.
But the rally for months suggests the stock is now highly valued, said Jason Pride, investment director for private wealth at Glenmede in Philadelphia.
“We are still in a cautious environment for the market as a whole,” Pride said, citing two reasons.
“We will get a vaccine-induced economic recovery, this is number 1. The reverse of this story is that markets are priced heavily and have moved into overvalued territory. The markets will fight this, “he said.
Concerns about rising inflation prospects have pushed investors to earn high-value equities in the S&P 500 technology and communications services sectors, which supported a 76% rise in the S&P 500 from its March 2020 lows. .
Peter Essele, head of portfolio management at the Commonwealth Financial Network in Boston, said there is a lot of irrational exuberance embedded in stock prices heading this year.
“We have begun to enter an environment where risk has actually become a factor again and especially inflationary risk,” he said. “The question now is whether the fundamentals will match the current price level.”
A Department of Labor report found that initial claims for state unemployment benefits rose to 861,000 last week from 848,000 the previous week, in part due to potential demands for the temporary closure of car plants due to a global shortage of semiconductor chips.
Of the 11 major S&P 500 sectors, only utilities and consumers grew at their discretion, while consumer fundamentals traded close to profitability.
Walmart Inc. fell after the world’s largest retailer missed quarterly profit estimates and predicted a single-digit increase in net tax sales in 2022.
“We receive mixed readings. Strong retail sales and then bad complaints. We’ll probably see that for the rest of this quarter, “said Jack Ablin, chief investment officer at Cresset Capital Management in Chicago.
“Even the Walmart story was not so bad on the surface; they will make more investments “, said Ablin.
Walmart has invested heavily in online advertising and healthcare companies over the past year, using the momentum of pandemic-driven sales to diversify beyond retail sales.
Marriott International Inc rose after reporting a quarterly loss as hotel chain bookings declined due to pandemic-induced travel restrictions.
Reporting by Herbert Lash; additional reports by Devik Jain and Shreyashi Sanyal in Bengaluru; Editing by Saumyadeb Chakrabarty, Anil D’Silva and Dan Grebler