Big Tech drop pulls indexes mostly lower

Losses by Microsoft, Apple outweigh gains by banks, other sectors

Wall Street capped a day of listless trading Thursday with a late-afternoon pullback led by technology companies that left the major stock indexes in the red.

The S&P 500 fell 0.4 percent. The benchmark index, which had been up by 0.4 percent, was weighed down by losses in Apple, Microsoft and other huge tech companies even though most of the stocks in the index rose. Those losses outweighed gains in banks, industrials and other sectors.

Small-company stocks bucked the trend and continued to rally, a sign that investors are feeling more optimistic about the economy. Treasury yields also rose. Still, the market pullback has the S&P 500 on track for its first weekly loss in three weeks.

“It’s a pause in a momentum trade that probably keeps going for a while,“said Ross Mayfield, investment strategy analyst at Baird. “Sentiment is still pretty hot, but has cooled a little bit.”

The S&P 500 fell 14.30 points to 3,795.54. The Dow Jones Industrial Average slid 68.95 points, or 0.2 percent, to 30,991.52. The Nasdaq composite dropped 16.31 points, or 0.1 percent, to 13,112.64. The indexes are still close to their record highs set last week.

Markets have been mostly charging higher recently amid growing optimism that the rollout of coronavirus vaccines will set the stage for a big rebound for the economy and corporate profits later this year. Expectations are also rising for another round of stimulus coming for the economy because Democrats are set to soon have control of the White House, Senate and House.

President-elect Joe Biden was expected to detail his plan bolster the economy in a speech later Thursday. Anticipation is high that it will include bigger

cash payments for most Americans and other stimulus. The hope is that it can tide the economy over until COVID-19 vaccines get life back toward normal and trigger a powerful recovery later this year.

Another discouraging report underscored how much damage the economy is taking as the pandemic worsens. Last week, 965,000 more U.S. workers filed for unemployment benefits last week as businesses shutter and lay off employees. That’s up sharply from the prior week’s tally of 784,000, and it was much worse than economists expected.

Such numbers could be fodder for critics of the stock market, who say prices have soared too high and look too expensive. But several analysts said they expect investors to continue to focus on hopes for a brighter future as temperatures warm and more people get vaccines.

“Further, a bleaker than expected jobs report translates into a greater likelihood for a full-throated stimulus package, which perversely acts as a tailwind for the market,” said Mike Loewengart, managing director of investment strategy at E-trade Financial.

Smaller companies jumped more than the rest of the market, as they often do when investors are upgrading their expectations for the economy. The Russell 2000 index of small-cap stocks rose 43.38 points, or 2.1 percent, 2,155.35, continuing its much better performance than the big stocks in the S&P 500 so far this year.

Airlines, oil producers and cruise ship operators also clawed back more of their steep losses from last year, when sales for many of them suddenly vanished because of the pandemic.

Delta Air Lines rose 2.5 percent even though it said it lost more money during the last three months of 2020 than analysts expected. The airline said it sees business turning higher through 2021 as vaccinations become more widespread and offices reopen. By the spring, it expects to stop burning more cash than it brings in.

Poshmark surged 141.7 percent in its initial public offering, which was priced at $42 per share. The company connects buyers and sellers of secondhand fashion and home decor online. Petco, whose stores sell pet food and sometimes have veterinary hospitals, surged 63.3 percent in its first day of trading after its shares priced at $18.

Longer-term Treasury yields rose. The yield on the 10-year Treasury rose to 1.13 percent from 1.07 percent late Wednesday. It’s been climbing sharply recently on expectations that COVID-19 vaccines and the soon-to-be Democratically controlled Washington will lead to more federal borrowing, economic growth and inflation. The 10-year yield was at 0.90 percent less than two weeks ago.