Tech Giants Pull US Stocks Lower

US retail sales increased more than expected in June, but a resurgence in new Covid-19 cases is undercutting the budding recovery, keeping 32 million Americans on unemployment benefits.

A jump in cases of the virus has forced California and other states to shut down again, sparking fears of more business damage and slowing the pace of a Wall Street rally. The S&P 500 is about 5 percent below its February record high.

"The economic data shows there is still a challenge going forward," said Willie Delwiche, an investment strategist at Baird in Milwaukee. "Congress better get its act together and pass another fiscal stimulus."

The S&P real estate and technology indexes each lost more than 1%, more than any others.

Apple declined 1.2 percent and Microsoft lost 2 percent, each weighing more than any other company on the S&P 500.

The S&P 500 has exceeded the Nasdaq by nearly 3 percentage points over the past week, its greatest five-day outperformance over the Nasdaq since late March, reflecting a shift away from Amazon.com, Microsoft and other major technology companies that have led Wall Street's gains in recent months.

"This is an early indication of good signs that money is now flowing away from completely overbought Nasdaq into those names that will bode well when the economy starts finding more of a solid footing," said Andrew Smith, chief investment strategist at Dallas, Texas-based Delos Capital Advisors.

Twitter Inc fell 1.1 percent after hackers accessed its internal systems to hijack some of the platform's top voices, including US presidential candidate Joe Biden, reality TV star Kim Kardashian West, former US President Barack Obama and billionaire Elon Musk and used them to solicit digital currency.

In extended trade, Netflix tumbled 10 percent after the streaming video service's quarterly report.

The Dow Jones Industrial Average fell 0.5 percent to end at 26,734.71, while the S&P 500 lost 0.34 percent to 3,215.57.

The Nasdaq Composite dropped 0.73 percent, to 10,473.83. (Reuters)