US STOCKS-Dow ends at record high as tech slides

  • Reuters
  • Stock Market News
US STOCKS-Dow ends at record high as tech slides
Credit: © Reuters.

* Peleton plunges on treadmill recall after injuries, death

* U.S. private payrolls increase solidly in April - ADP (NASDAQ: ADP )

* Energy, materials lead sectoral gains on S&P 500

(Adds comments, updates prices to close)

By Krystal Hu and Shreyashi Sanyal

May 5 (Reuters) - The Dow Jones Industrial Average ended at a record high on Wednesday, while Nasdaq gave up its earlier gains and closed in red.

Energy .SPNY and materials .SPLRCM continued this week's momentum, leading gains among S&P 500 sectors. Defensive utilities .SPLRCU and real estate .SPLRCR led sectoral declines.

"Energy, financial, materials, industrials are all outperforming. They tend to be cyclically oriented sectors and tend to benefit during periods when the economies are reopening and expanding," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management.

The Philadelphia SE Semiconductor index .SOX recovered from a sell-off on Tuesday. Megacap technology companies including Inc AMZN.O and Facebook Inc FB.O and Alphabet Inc GOOGL.O were down.

Strong economic data and earnings pushed the S&P 500 and Nasdaq indexes to record high last week, but markets have wobbled amid concerns about rising inflation and potentially higher U.S. interest rates.

"Once you have markets hitting the highs we have seen recently, the one thing investors are worried about is rising inflation and what that means for profitability of companies," said Shawn Cruz, senior market strategist at TD Ameritrade.

Tech sell-off accelerated on Tuesday after Treasury Secretary Janet Yellen suggested that interest rates might need to rise in an overheating economy.

She later clarified that a near-term interest rate hike was not something she was "predicting or recommending" on Tuesday evening.

The ADP National Employment Report showed U.S. private payrolls increased in April as companies rushed to boost production amid a surge in demand, powered by massive government aid and rising vaccinations against COVID-19. more comprehensive reading in the form of the Labor Department's non-farm payrolls data is due on Friday.

Unofficially, the Dow Jones Industrial Average .DJI rose 96.99 points, or 0.28%, to 34,230.02, the S&P 500 .SPX gained 2.97 points, or 0.07%, to 4,167.63 and the Nasdaq Composite .IXIC dropped 51.08 points, or 0.37%, to 13,582.43.

Peloton Interactive Inc PTON.O hit a seven-month low on its announcement to recall its treadmills amid reports of multiple injuries and the death of a child in an accident. Co BA.N fell after U.S. air safety officials asked it to supply fresh analysis and documentation showing 737 MAX subsystems would not be affected by electrical grounding issues. US Inc TMUS.O jumped as it raised its full-year postpaid subscriber net additions forecast. Technologies Inc UBER.N is set to report earnings after markets close on Wednesday.

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