- Netflix gains after Wells Fargo raises PT
- Coinbase rebounds a day after hitting seven-month low
- indices:
June 7 (Reuters) – The S&P 500 and Nasdaq ended in negative territory on Wednesday as investors took profits after months of bullish mega-cap stocks ahead of key economic and political events next week.
The Russell 2000 small-cap index (.RUT) rose 1.78% as investors continued to flee megagap and growth stocks after their strong gains.
“Over the past week, we’ve seen quite dramatic outperformance by small-cap versus large-cap,” said Paul Baiocchi, chief ETF strategist at investment firm SS&C ALPS Advisors. “We can see that this is still the case today.”
US inflation data is expected to show that consumer prices fell modestly in May from the previous month, albeit with core prices elevated.
Detracting from equity markets, two-year US Treasury yields and benchmark 10-year Treasury yields rose after the Bank of Canada hiked interest rates, adding to investor nervousness about the Federal Reserve’s next US interest rate decision.
According to the CME’s Fedwatch tool, money market participants now see a 69% chance that the Federal Reserve will refrain from raising rates at its June meeting but will hike them in July, down from nearly 77% previously .
More recently, US stocks have been buoyed by a rally in mega-cap stocks and a stronger-than-expected earnings season, with the S&P 500 (.SPX) gaining almost 20% from its October 2022 lows.
Some analysts are expecting profit-taking in big tech and other big growth stocks soon.
Meanwhile, the CBOE Volatility Index (.VIX) hit its lowest close since February 14, 2020.
According to Refinitiv, Wells Fargo has raised its price target on Netflix (NFLX.O) stock to $500 from $400, the highest on Wall Street. The streaming company traded 0.12% higher on the news.
The Energy Index (.SPNY) rose 2.65% after oil prices edged higher, while the KBW Regional Banking Index (.KRX) closed at the highest level since March 29.
The Dow Jones Industrial Average (.DJI) was up 91.74 points, or 0.27%, to 33,665.02, the S&P 500 (.SPX) was down 16.33 points, or 0.38%, to 4,267.52 and the Nasdaq Composite (.IXIC) fell 171.52 points, or 1.29%, to 13,104.90.
Yext Inc rose 38.44% after the New York-based online marketing company raised its full-year profit guidance.
Campbell Soup (CPB.N) fell 8.91% after the packaged food maker reported a lower gross margin in the fiscal third quarter, hurt by high raw material and freight costs.
Coinbase (COIN.O) shares rose 3.20% the day after hitting a seven-month low as the company’s CEO reassured customers their funds were safe and criticized the US Securities and Exchange Commission for its lawsuit . On Tuesday, the SEC sued the largest US crypto exchange, accusing it of operating illegally without first registering with the regulator.
Cathie Woods Ark Invest bought 419,324 shares from Coinbase on Tuesday.
Rising issues outpaced declines on the NYSE by 1.58 to 1; On the Nasdaq, a 1.27-to-1 ratio favored the movers.
The S&P 500 posted 22 new 52-week highs and no new lows; The Nasdaq Composite posted 122 new highs and 40 new lows.
Reporting by Shubham Batra and Shristi Achar A in Bengaluru. Edited by Vinay Dwivedi, Richard Chang and David Gregorio
Our standards: The Thomson Reuters Trust Principles.
Shristi Achar A
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