* Falling big tech-related companies put pressure on Nasdaq, S&P 500
* Walmart slides as a lukewarm outlook overshadows fourth-quarter optimistic sales
* Facebook shares withdraw from falling news in Australia (adds market closing at 4pm)
NEW YORK, Feb 18 (Reuters) – Wall Street shares fell on Thursday as investors abandoned big tech names, while an unexpected rise in weekly U.S. jobless claims pointed to a fragile recovery in labor market.
Shares of Apple Inc., Microsoft Corp., Tesla Inc. and Alphabet Inc. fell between 0.5% and 1.2%, weighing on both the benchmark S&P 500 and the high-tech Nasdaq.
Shares of Facebook Inc. fell as Wall Street assessed the broader ramifications of its move to block all news content in Australia.
Unofficially, the Dow Jones Industrial Average fell 118.7 points, or 0.38%, to 31,494.32, the S&P 500 lost 17.3 points, or 0.44%, to 3,914.03, and the Nasdaq Composite fell 100.14 points, or 0.72%, to 13,865.36.
Strong gains, progress in vaccination launches, and hopes for a $ 1.9 trillion federal stimulus package helped U.S. stock market indices return to record highs early in the year. the week.
But the month-long rally suggests stocks now have high valuations, said Jason Pride, Glenmede’s director of private wealth investment in Philadelphia.
“We’re still in a prudently bullish environment for the market in general,” said Pride, who cited two reasons.
“We’re going to get a vaccine-induced economic recovery, it’s number 1. The reverse of the story is that the markets have come at a significant price and have led to overvalued territory. The markets will struggle with that,” he said.
Concerns about rising inflation prospects have pushed investors to record high-value equities gains in the S&P 500 technology and communications services sectors, which have sustained a 76% increase in the S&P 500 since its inception. March 2020 lows.
Peter Essele, head of portfolio management at Boston’s Commonwealth Financial Network, said there was a lot of irrational exuberance built into stock prices around this year.
“We started entering an environment where risk became a factor once again and, above all, inflationary risk,” he said. “Now it’s about whether the fundamentals will match the current price level.”
A Department of Labor report showed that initial demands for state unemployment benefits rose to 861,000 last week from 848,000 the previous week, in part due to possible claims related to the temporary closure of car plants due to the global shortage of semiconductor chips.
Of the top 11 S&P 500 sectors, only utilities and consumers increased at their discretion, while trade commodities traded at break-even point.
Walmart Inc. fell after the world’s largest retailer missed quarterly earnings estimates and predicted a single-digit increase in net sales for fiscal year 2022.
“We have mixed readings. Strong retail sales and then terrible claims. We’ll probably see it for the rest of this quarter, ”said Jack Ablin, Cresset Capital Management’s chief investment officer in Chicago.
“Even Walmart’s history wasn’t so bad on the surface; they will make more investments, ”said Ablin.
Walmart has invested heavily in online advertising and healthcare businesses over the past year, using a pandemic-driven sales boost to diversify beyond retail.
Marriott International Inc. rose after reporting a quarterly loss as hotel chain bookings declined due to pandemic-induced travel restrictions.
Herbert Lash Reports; additional reports from Devik Jain and Shreyashi Sanyal in Bengaluru; Edited by Saumyadeb Chakrabarty, Anil D’Silva and Dan Grebler