While you were sleeping: Tech stocks drop

Friday 30th June 2017

Wall Street declined as a slide in tech stocks outweighed a rally in bank stocks as central banks in the US, Canada, the UK and the eurozone signalled a stance towards tightening monetary policy.

US Treasuries declined, sending the yield on the 10-year note four basis points higher to 2.27 percent. German bunds also slid.

“Markets are quite nervous about central banks,” Andrea Tueni, a trader at Saxo Bank, told Bloomberg. “There is a kind of hawkish pivot by global central bankers that seems to have come in concert.”

In 3.19pm trading in New York, the Dow Jones Industrial Average slid 0.6 percent, while the Nasdaq Composite Index retreated 1.4 percent. In 3.04pm trading, the Standard & Poor’s 500 Index declined 0.7 percent.

The Dow fell as slides in shares of Cisco and those of Microsoft, recently down 2.1 percent and 2 percent respectively, outweighed gains in JPMorgan Chase and those of Goldman Sachs, recently up 2.1 percent and 0.8 percent respectively.

"US equities have remained extended, at or close to record territory for an extended period of time really without a tremendous amount of conviction in the market," Peter Kenny, senior market strategist at Global Markets Advisory Group, in New York, told Reuters.

"It’s really been treading water,” Kenny noted. “Without a major stimulus to drive prices higher, equities have to reset and that’s what they’re doing today.”

Shares of Rite Aid plunged, trading 26.2 percent weaker as of 3.30pm in New York, after Walgreens Boots Alliance abandoned a deal to buy its rival. Instead it agreed to buy 2,186 stores, three distribution centres and related inventory from Rite Aid for about US$5.2 billion.

“We believe this new transaction addresses competitive concerns previously raised with respect to the prior transaction and will streamline and simplify the transition for customers, team members and other stakeholders,” Walgreens CEO Stefano Pessina said in a statement.

Shares of Walgreens traded 1.7 percent stronger in late afternoon in New York.

Meanwhile, shares of Blue Apron, a US meal-kit delivery company founded five years ago, struggled in their first day of trading, even after Wednesday’s downgrade to its initial public offering price following Amazon’s deal to buy Whole Foods.

Blue Apron sold 30 million shares at US$10 each, which had initially been marketed at between US$15 and US$17. The stock traded at US$10.06 as of 1.01pm in New York. Earlier in the day, it rose as high as US$10.46.

In Europe, the Stoxx 600 Index ended the day with a 1.3 percent retreat from the previous close.

Germany’s DAX Index dropped 1.8 percent, France’s CAC40 Index decreased 1.9 percent, while the UK’s FTSE 100 Index fell 0.5 percent.

(BusinessDesk)

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