(In the August 31 story, paragraph 5, corrects the company name to SpiderRock, from SpringRock)
By David French
(Reuters) -Wall Street ended slightly lower on Tuesday, although the slightly subdued end of August did not detract from a strong monthly performance of its three major indices, in what is traditionally seen as a quiet period for the actions.
Having all posted lifetime highs in the second half of the month, including four record-breaking five-session closings for the S&P 500 before Tuesday, all three benchmarks were weighed down by tech stocks on the final day.
For the S&P, which rose 2.9% in August, it was a seventh consecutive month of gains, while the Dow Jones and the Nasdaq are up 1.2% and 4% respectively since late July. .
The performance reflects the level of investor confidence in US equities derived from the Federal Reserve’s continued dovish tone towards scaling back its massive stimulus package.
“After all the monetary and fiscal interventions, the question is, where do we go from here? Is the S&P going to 5,000 and how does it get there?” said Eric Metz, CEO of SpiderRock Advisors.
While a strong rebound in economic growth and corporate earnings has boosted U.S. stocks, investors are concerned about the increase in coronavirus cases and the direction of Fed policy.
US consumer confidence fell to its lowest level in six months in August, according to Conference Board survey data on Tuesday, offering a cautious note for the economic outlook.
A Reuters poll last week showed strategists believe the S&P 500 is expected to end 2021 not far from its current level.
“Where will the leadership come from so that the actions take height?” Is it earnings growth, is it growth relative to value, technology or energy? This needs to be defined, but I think the next step for equities will be sector driven, “Metz added.
Tech stocks have continued to attract investor interest in recent days, given the benefits that lowering rates have on their future earnings, although the industry index was among the worst performers on Tuesday.
Apple shares fell 0.8% after hitting a lifetime high in the previous session, while Zoom Video Communications Inc fell 16.7%, signaling faster-than-expected easing in demand for its videoconferencing service after a boom caused by the pandemic.
Seven of S&P’s top 11 sectors fell. Among those that did not were the real estate and communications services indices, which closed at record levels.
On Tuesday, the Dow Jones Industrial Average lost 39.11 points, or 0.11%, to 35,360.73, the S&P 500 lost 6.11 points, or 0.13%, to 4,522.68 and the Nasdaq Composite lost 6.66 points, or 0.04%, to 15,259.24.
Kansas City Southern fell 4.4% in afternoon trading after the US rail regulator rejected a voting trust structure that would have allowed Canadian National Railway Co to proceed with its proposed acquisition of $ 29 billion from its American counterpart.
Volume on the U.S. exchanges was 9.84 billion shares, compared to 8.98 billion on average for the full session over the past 20 trading days.
The S&P 500 posted 43 new 52-week highs and no new lows; the Nasdaq Composite recorded 119 new highs and 23 new lows.
(Reporting by Shashank Nayar in Bengaluru and David French in New York; Editing by Aditya Soni and Lisa Shumaker)