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Tech shares sell off as US stocks retreat from records

·2-min read

Wall Street stocks tumbled Tuesday, with tech shares selling off ahead of major earnings reports in a move attributed to profit taking after prices surged in recent days.

The Nasdaq, along with the two other major indices, finished at records the last two sessions amid enthusiasm over strong corporate earnings that offset worries about the Delta variant of the coronavirus.

But the tech-rich index took a hit Tuesday, falling 1.2 percent to close at 16,493.67.

The Dow Jones Industrial Average dipped 0.2 percent to 35,058.92, while the broad-based S&P 500 shed 0.5 percent to end at 4,401.52.

"Today is profit taking after a big run," said analyst Patrick O'Hare, adding that tech investors took note of Tesla's 2.0 percent decline Tuesday despite reporting blowout profits on Monday night.

Investors sense a similar dynamic may play out with Apple, Google-parent Alphabet and Microsoft, which all fell around one percent or more ahead of quarterly reports due later Tuesday.

Economic data was mixed, with the Commerce Department reporting that orders for big-ticket manufactured goods increased 0.8 percent in June, weaker than expected and much less than the 3.2 percent growth seen the prior month.

But consumer confidence unexpectedly rose in July, according to The Conference Board survey, showing Americans remained relatively upbeat about the current economic situation and outlook for the future.

Markets are awaiting the Federal Reserve's policy announcement on Wednesday. Investors expect the US central bank to maintain easy money policies but perhaps offer clues on when it might shift course on its bond buying strategy.

O'Hare said equity investors are not worried about a major shift in Fed messaging, expecting the US central bank to maintain its strategy of "waiting and watching" before any change of course in light of the Delta variant.

Among individual companies, Activision Blizzard dropped 6.8 percent on news some employees planned a walk out Thursday to protest sexism at the video game company.

The California Department of Fair Employment and Housing filed a civil complaint last week claiming the maker of the popular "Call of Duty" and "World of Warcraft" games violated state laws by allowing a "pervasive frat boy workplace culture."

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