U.S. equities and stock exchange traded funds hit new intra-day highs but lost their momentum Thursday as technology sector weighed on the markets.
The S&P 500 Index, along with related funds including the SPDR S&P 500 ETF (NYSEARCA: SPY), iShares Core S&P 500 ETF (NYSEARCA: IVV) and Vanguard 500 Index (NYSEARCA: VOO), were 0.6% lower Thursday.https://etfdb.com/etf/SPY/
Weighing on the markets, technology companies in the S&P 500 declined 1.2%.
U.S. markets initially started the day off on a positive note, rising on a number of strong quarterly earnings, led by Facebook (NasdaqGS: FB) and Verizon (NYSE: VZ), Reuters reports.
“Technology stocks are beating estimates by a large margin and most tech companies are growing at a core, organic rate without the economy growing too much,” Aaron Clark, portfolio manager at GW&K Investment Management, told Reuters.
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The improved earnings results have raised expectations on earnings of S&P 500 companies to 10.7% in the second quarter, up from an 8% rise estimated at the start of the month, according to Thomson Reuters.
“While multiples are not cheap and are expected to grow further, strong earnings are justifying these levels,” Clark added.
However, U.S. equities turned lower in afternoon trading, with a precipitous drop in the Nasdaq, which fell over 1% in 30 minutes. Some saw this as an opportunity to take some money off the table and lock in gains after a strong bounce on the upbeat corporate earnings since the start of the month.
“You’re now seeing some pressure on the broader market after the initial pop at the open,” Daniel Deming, managing director at KKM Financial, told CNBC. “It just feels like momentum is waning here.”
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