Wall Street retreats as business activity slows

(Reuters) – Wall Street’s main indexes fell on Wednesday as data showed domestic business activity slowed in September, although a record high for Nike following a strong quarterly earnings report capped declines on the blue-chip Dow.

The 11 Wall St. door of the New York Stock Exchange (NYSE) is seen in New York City, New York, U.S., June 26, 2020. REUTERS/Brendan McDermid

Nine of the 11 major S&P indexes were down in morning trading, with energy .SPNY – already the worst performing sector this year – leading declines.

Hopes of a stable economic rebound from a pandemic-led recession, combined with historic fiscal and monetary stimulus, had driven a rally in the three main U.S. stock indexes since a coronavirus-driven crash in March.

However, doubts over the next coronavirus relief bill as well as a selloff in heavyweight technology-related stocks have weighed on sentiment this month, with Wall Street favorites including Facebook Inc FB.O, Apple Inc AAPL.O and Amazon.com Inc AMZN.O bearing the brunt of the losses.

“There’s a lot of uncertainties out there, not the least of which is the election, what stimulus can potentially look like and if an increase in COVID-19 cases leads to more restrictions,” said Lindsey Bell, chief investment strategist at Ally Invest in Charlotte, North Carolina.

Data on Wednesday showed gains at factories were offset by a slowdown in the services sector this month, suggesting a loss of momentum in the economy at a time when concerns are rising about a potential surge in COVID-19 cases heading into the colder months.

Meanwhile, Federal Reserve Chair Jerome Powell said the central bank was not planning any “major” changes to make its Main Street Lending Program more broadly available, saying companies had made only “modest” use of the facility.

At 11:38 a.m. ET, the S&P 500 was down 0.53%, while the Nasdaq Composite .IXIC fell 0.94%. In contrast, the Dow Jones Industrial Average .DJI declined just 0.17%.

“When the Dow outperforms the Nasdaq, it’s telling you that the market believes the reopening (and) vaccines are on track, and that’s going to help the type of large industrial stocks,” said Thomas Hayes, managing member at Great Hill Capital LLC in New York.

Nike Inc NKE.N surged 9.7% to a record high as its digital sales, especially in North America, helped offset a fall in sales at traditional brick-and-mortar stores.

Tesla Inc TSLA.O tumbled 7.5% after Chief Executive Officer Elon Musk failed to impress with his promise to cut electric vehicle costs at the much awaited “Battery Day” event on Tuesday.

Oracle Corp ORCL.N fell 2.2% after a report by a state-backed Chinese newspaper said Beijing was unlikely to approve a proposed deal by the software maker and Walmart WMT.N for ByteDance’s TikTok.

Johnson & Johnson JNJ.N gained 1% after kicking off a final 60,000-person trial of a single-shot COVID-19 vaccine that would potentially simplify distribution of millions of doses, compared with leading rivals using two doses.

Declining issues outnumbered advancers 1.79-to-1 on the NYSE and 1.55-to-1 on the Nasdaq.

The S&P index recorded three new 52-week highs and no new low, while the Nasdaq recorded 30 new highs and 22 new lows.

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