Wall Street's main indexes hovered near record highs on Tuesday despite weakness in technology stocks, with the S&P 500 heading for a seventh straight month of gains as fears ebbed over near-term policy tightening by the Federal Reserve.
Four of the 11 major S&P sectors retreated, with technology and materials among the top losers.
Shares of Apple (NASDAQ:AAPL) fell 0.6% and were the biggest drag on the Nasdaq, while Zoom Video Communications (NASDAQ:ZM) Inc tumbled 16.7% as it signaled a faster-than-expected easing in demand for its video-conferencing service after a pandemic-driven boom.
"It is hard to rationalize the surge that tech stocks have been seeing, while technology is a really good industry, its prices and valuations are really hard to keep up with and investors are looking for other areas with much higher upside," said Sandi Bragar, managing director at wealth management firm Aspiriant in California.
The benchmark S&P 500 was on course for its longest monthly winning streak since 2018 with a near 3% rise in August, after Fed Chair Jerome Powell last week signaled no rush to tighten monetary policy.
"There continues to be a positive bias towards U.S. equities and investors are just holding back as we near the anticipated labor market data," said Arthur Weise, chief investment officer of Kingsland Growth Advisors.
While a strong recovery in economic growth and corporate earnings have boosted U.S. stocks in August, investors are concerned about rising coronavirus cases and the path of Fed policy.
A Reuters poll last week showed strategists believe the S&P 500 is likely to end 2021 not far from its current level.
Investors will also focus on payrolls data later in the week, which could feed into the Fed's decision at its September policy meeting.
At 12:03 pm ET, the Dow Jones Industrial Average rose 37.18 points, or 0.11%, to 35,437.02, the S&P 500 fell 0.25 points, or 0.01%, to 4,528.54, and the Nasdaq Composite lost 18.41 points, or 0.12%, to 15,247.48.
Among other stocks, Textron Inc (NYSE:TXT) rose 1% after Cowen upgraded the Cessna business jet maker's stock to "outperform" from "market perform" and raised its price target to a Street-high of $95.
Advancing issues outnumbered decliners by a 1.4-to-1 ratio on the NYSE.
The S&P 500 posted 37 new 52-week highs and no new lows while the Nasdaq recorded 113 new highs and 38 new lows. (Reuters)