Growth stocks drag Nasdaq lower, energy stocks rally

A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., June 22, 2022. REUTERS/Brendan McDermid

June 27 (Reuters) – The Nasdaq Composite Index fell into midday trade on Monday, dragged lower by high-growth stocks as last week’s rally lost momentum on easing inflation concerns, while a rebound in oil prices buoyed energy company stocks gave.

“We had a nice rally last week, so we’re seeing a bit of profit-taking this morning,” said Dennis Dick, a proprietary trader at Bright Trading LLC in Las Vegas.

“The stocks that rose the most last week will be hit the hardest here today.”

The tech-heavy Nasdaq Composite (.IXIC) index, which rose 7.5% last week, fell 0.3%, the only decline among the big three indices.

Investors have been betting on the fall in oil prices from the three-month highs reached in June, potentially easing inflationary pressures and likely urging the US Federal Reserve to ease its aggressive monetary tightening.

Data on Monday showed new orders for US-made capital goods and shipments, which rose solidly in May, suggesting continued strength in corporate spending on equipment in the second quarter. Continue reading

Oil prices also moved back into positive territory, sending the S&P 500 Energy Index (.SPNY) up 2.5%, dampening expectations for a slowdown in inflation due to lower energy prices.

The US Federal Reserve has been quick to raise interest rates to tame 40 years of high inflation, stoking fears its actions could plunge the world’s largest economy into recession.

The benchmark S&P 500 (.SPX) index fell 20% from its January peak earlier this month to confirm a bear market.

For the quarter, the S&P 500 and Dow Jones Industrial Average (.DJI) headed for a second straight quarterly decline for the first time since the second and third quarters of 2015.

“We think they hit a bottom for the quarter,” said Jay Hatfield, chief investment officer at Infrastructure Capital Management in New York.

“June is typically a weak month as there are very few earnings reports, so we think we hit the lows in June.”

As of 12:15 p.m. ET, the Dow Jones Industrial Average (.DJI) was up 16.97 points, or 0.05%, to 31,517.65, and the S&P 500 (.SPX) was up 9.75 points, or 0.25% 3,921.49 and the Nasdaq Composite (.IXIC) fell 39.09 points, or 0.34%, to 11,568.53.

Robinhood Markets Inc (HOOD.O) shares rose 3.3% after Goldman Sachs upgraded the retail broker’s stock to neutral from a sell.

However, Goldman Sachs lowered its rating on Coinbase Global Inc (COIN.O) to sell from buy, sending shares of the cryptocurrency exchange down 8.7%.

For a 1.69-to-1 ratio on the NYSE and a 1.08-to-1 ratio on the Nasdaq, rising issuance outweighed detractors.

The S&P index posted a new 52-week high and 29 new lows, while the Nasdaq posted 21 new highs and 59 new lows.

Reporting by Shreyashi Sanyal and Amruta Khandekar in Bengaluru; Edited by Vinay Dwivedi and Shounak Dasgupta

Our standards: The Thomson Reuters Trust Principles.