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S&P 500 ends down slightly after flirting with record levels again

Aug 13, 2020 | ,

By Caroline Valetkevitch

(Reuters) – The S&P 500 ended slightly lower on Thursday after briefly trading above its record closing high level for a second day, and the Dow also fell in the wake of a disappointing forecast from Cisco Systems Inc <CSCO.O>.

The benchmark S&P 500 rose as high as 3,387.24 during the session, just above its record high closing level of 3,386.15 from Feb. 19. The record came just before investors sold shares in anticipation of what proved to be the biggest slump in the U.S. economy since the Great Depression. The index’s intraday record high of 3,393.52 was also set on Feb. 19.

An 11.2% slump in shares of Cisco Systems weighed on the Dow and S&P 500 after the company forecast first-quarter revenue and profit below estimates.

Concern about corporate earnings has continued despite a mostly stronger-than-expected second-quarter profit season.

“The outlook for earnings in the next few quarters seems to be getting watered down by a lot of big companies,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

“It’s making for a sluggish market without a real catalyst to push it up and over the hurdle for good,” he said, referring to the S&P 500’s record.

Apple Inc <AAPL.O> shares rose 1.8%, helping to support the Nasdaq and limiting losses in the S&P 500.

Also limiting bearishness, jobless claims fell below 1 million for the first time since efforts to curb the COVID-19 outbreak in the United States began five months ago.

Wall Street has recovered most of the trillions in market capitalization lost during the start of the pandemic and the Nasdaq was the first of the three major indexes to hit a record high in June. The Dow remains below its February peak.

The Dow Jones Industrial Average <.DJI> fell 80.12 points, or 0.29%, to 27,896.72, the S&P 500 <.SPX> lost 6.92 points, or 0.20%, to 3,373.43 and the Nasdaq Composite <.IXIC> added 30.27 points, or 0.27%, to 11,042.50.

Initial claims for state unemployment benefits decreased to 963,000 for the week ended Aug. 8, the lowest level since mid-March. But the expiration of a $600 weekly jobless supplement at the end of July likely contributed to the decline.

Data last week showed the economy had regained only 9.3 million of the 22 million jobs lost between February and April, indicating a long road to reach pre-pandemic levels.

Investors continue to hold on to hopes Democrats and the White House can reach agreement on a stimulus package to help the economy recover. Unemployment benefits have been a sticking point in their talks.

The U.S. presidential election is expected to add another layer of uncertainty into markets, with roughly 12 weeks remaining until Election Day.

Among declining stocks, Tapestry Inc <TPR.N> fell 1.1% even as it beat quarterly sales estimates.

Declining issues outnumbered advancing ones on the NYSE by a 1.42-to-1 ratio; on Nasdaq, a 1.21-to-1 ratio favored decliners.

The S&P 500 posted 15 new 52-week highs and no new lows; the Nasdaq Composite recorded 62 new highs and 18 new lows.

Volume on U.S. exchanges was 8.70 billion shares, compared with the 10.2 billion average for the full session over the last 20 trading days.

(Additional reporting by Ambar Warrick and Medha Singh in Bengaluru; Editing by Arun Koyyur, Uttaresh.V and Tom Brown)

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