Stocks close lower on Wall Street as rally momentum cools

Business

A currency trader walks by a screen showing the foreign exchange rate between U.S. dollar and South Korean won at a foreign exchange dealing room in Seoul, South Korea, Thursday, Dec. 9, 2021. (AP Photo/Lee Jin-man)

Stocks closed lower on Wall Street Thursday as investors tapped the brakes after three days of gains. The S&P 500 fell 0.7%,and the Nasdaq fell 1.7%. The Dow Jones Industrial Average slipped less than 1 point. Small-company stocks fell more than the rest of the market. The pullback came after investors pushed the S&P 500 index up 3.6% over the first three days of the week, largely in response to easing worries about the omicron variant of the COVID-19 virus. CVS Health rose after raising its dividend and issuing a solid forecast. The yield on the 10-year Treasury fell to 1.49%.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

Stocks edged lower in afternoon trading on Wall Street Thursday as investors tapped the brakes after three days of gains.

The S&P 500 fell 0.4% as of 2:40 p.m. Eastern. The Dow Jones Industrial Average rose 62 points, or 0.2%, to 35,816 and the Nasdaq fell 1.2%. Two stocks fell for every one that rose on the New York Stock Exchange.

The pullback follows a 3.6% gain for the benchmark S&P 500 index over the first three days of the week, largely in response to easing worries about the omicron variant of the COVID-19 virus. That marked an about-face for stocks following two weeks of losses over concerns about rising inflation and the coronavirus potentially crimping economic growth. Every major index is on track for a weekly gain.

Technology stocks and a mix of retailers and other companies that rely on direct consumer spending weighed on the S&P 500 the most. Chipmaker Nvidia fell 3.4% and Best Buy fell 2.3%.

Travel-related companies slipped after spending the last few days gaining ground. Carnival fell 1.8% and United Airlines fell 1.5%.

Bond yields fell slightly. The yield on the 10-year Treasury fell to 1.49% from 1.51% late Wednesday.

Energy futures were broadly lower. The price of U.S. crude oil fell 2.3% and helped pull energy stocks lower. Devon Energy fell 4.1%.

Health care companies rose. CVS Health climbed 4.9% after raising its dividend and issuing a solid forecast. Pfizer, which has been touting the potential benefits of a vaccine booster against the latest COVID-19 variant, rose 2.2%.

Investors received an encouraging update on job market’s recovery. The Labor Department reported that the number of Americans applying for unemployment benefits plunged last week to the lowest level in 52 years.

The employment market’s recovery has been a key focus for Wall Street while it gauges the strength of the economy as it moves past the virus pandemic. Rising inflation has been another focus, and investors will get an update Friday when the Labor Department releases its Consumer Price Index for November.

The latest inflation data comes ahead of the Federal Reserve’s two-day meeting of policymakers next week. Rising inflation has prompted the central bank to speed up the pace at which it trims its bond purchases, which have helped keep interest rates low. That has raised concerns that the Fed will raise its benchmark interest rates next year sooner than expected.

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