(For a Reuters live blog on U.S., UK and European stock
markets, click or type LIVE/ in a news window.)
*
US services sector cools in February, ISM survey shows
*
Target ( TGT ) forecasts FY comparable sales above estimates
*
Apple ( AAPL ) drops after China iPhone sales plunge
*
Indexes down: Dow 0.50%, S&P 0.61%, Nasdaq 1.29%
(Updated at 10:10 a.m. ET/1510 GMT)
By Bansari Mayur Kamdar and Amruta Khandekar
March 5 (Reuters) -
Wall Street fell on Tuesday, with weakness in megacap growth
stocks weighing on the Nasdaq as investors assessed a slew of
economic data and awaited remarks from Federal Reserve Chair
Jerome Powell.
Data showed
U.S. services industry growth
slowed a bit in February amid a decline in employment, but
a measure of new orders increased to a six-month high, pointing
to underlying strength in the sector.
The PMI was consistent with continued economic expansion
despite 525 basis points worth of interest rate hikes from the
Fed since March 2022.
Another survey showed factory orders fell 3.6% in
January, compared to estimates of a 2.9% decline.
Traders see a 67.2% chance of the first rate cut this year
arriving in June, as per CME Group's FedWatch tool.
An AI-fueled rally on Wall Street ran out of steam at
the start of this week as focus turns to fresh cues on the Fed's
monetary policy path after signs of sticky inflation in February
dampened hopes of early interest rate cuts.
The benchmark S&P 500 hit a fresh intraday record
high on Monday before closing slightly lower in the run up to
Powell's testimony before lawmakers on Wednesday and Thursday.
"I think he's going to continue to reiterate that the
narrative is going to be rate cuts may be coming (but) there's
no immediate plan to cut them. Thus you see some of the angst in
the tech space," said Ken Polcari, chief market strategist at
Slatestone Wealth.
Apple ( AAPL ) slid 2.8% after a research report showed
iPhone sales in China fell 24% year-on-year in the first six
weeks of 2024 as the U.S. company faced increased competition
from domestic rivals such as Huawei.
Other megacap growth and technology stocks also declined,
with Tesla down 3.3% after its European Gigafactory
near Berlin halted production after a suspected arson attack.
Six of the 11 major S&P 500 sub-indexes declined in early
trading, with rate-sensitive sectors such as technology
leading losses.
A raft of employment data, including the crucial nonfarm
payrolls report, is also due in the coming days.
At 10:10 a.m. ET, the Dow Jones Industrial Average
was down 194.04 points, or 0.50%, at 38,795.79, the S&P 500
was down 31.07 points, or 0.61%, at 5,099.88, and the
Nasdaq Composite was down 209.02 points, or 1.29%, at
15,998.49.
Target ( TGT ) jumped 11.7% after the big-ticket
retailer forecast annual comparable sales largely above
estimates, betting on same-day services, product launches and a
new membership program to boost spending.
Microstrategy ( MSTR ) shed 6.8% after the bitcoin
development company announced a private offering for $600
million in convertible senior notes, with proceeds to be used to
buy bitcoin.
Advancing issues outnumbered decliners by a 1.31-to-1 ratio
on the NYSE. Declining issues outnumbered advancers for a
1.44-to-1 ratio on the Nasdaq.
The S&P index recorded 38 new 52-week highs and four new
lows, while the Nasdaq recorded 53 new highs and 62 new lows.