* U.S. economy grew 1.4 pct in Q1 vs prior reading of 1.2
* Nasdaq on track to post monthly loss after 7 months of
* Rite Aid slumps to near 4-yr low after Walgreens
* Indexes down: Dow 0.77 pct, S&P 0.88 pct, Nasdaq 1.62 pct
(Updates to early afternoon)
By Ankur Banerjee and Tanya Agrawal
June 29 (Reuters) – Wall Street extended losses in early
afternoon trading on Thursday with all three major indexes on
track to post their biggest one-day drop in a month as a selloff
in technology stocks deepened.
Tech stocks, which have led the S&P 500’s record run this
year, pulled back recently after some investors questioned the
sector’s high valuations and shifted to defensive sectors.
The S&P tech index led the laggards among the 11
sectors, with the index on track to post its biggest monthly
loss in a year.
Apple, which fell 1.8 percent, was the biggest drag
on all the three major indexes, while Alphabet,
Microsoft and Amazon were among the top three
drags on the Nasdaq and the S&P.
The CBOE Volatility index, or Wall Street’s “fear
gauge”, hit more than a one-month high of 12.38 points.
The financial sector, which rose as much as 2.02
percent, before paring gains to trade up 0.31 percent, was one
of the only two gainers.
Shares of the top six U.S. banks rose after the Federal
Reserve cleared them in the second part of its annual stress
test, allowing them to raise dividend payouts and share
“Part of the reason why tech is down today is the steam in
the recent rotation out of some of big tech winners and into
banks,” said Michael Scanlon, portfolio manager at Manulife
Asset Management in Boston.
“The catalyst for that rotation today is the really strong
stress test results coupled with higher treasury rates this
morning and a positive GDP revision, leading investors to move
into financial which has underperformed this year.”
The financial index has grown about 6 percent this year,
underperforming the 8.1 percent rise in the S&P.
At 12:41 P.m. ET (1641 GMT), the Dow Jones Industrial
Average was down 166.04 points, or 0.77 percent, at
21,288.57, the S&P 500 was down 21.49 points, or 0.88
percent, at 2,419.2.
The Nasdaq Composite index was down 100.77 points,
or 1.62 percent, at 6,133.65, on track to post a monthly loss
after seven straight months of gains.
Earlier in the day, data showed the U.S. economy slowed less
sharply in the first quarter than initially estimated due to
unexpectedly higher consumer spending and a bigger jump in
Oil prices rose to a two-week high, extending the rally into
the sixth straight session, after a decline in weekly U.S.
production eased concerns about deepening oversupply, helping
the energy sector post a gain of 0.38 percent.
Among stocks, Rite Aid slumped as much as 30 percent
to a near four-year low after Walgreens Boots Alliance
terminated its agreement to buy the drug store chain and said it
would instead buy nearly half of its stores for $5.18 billion.
Declining issues outnumbered advancers on the NYSE by 2,156
to 714. On the Nasdaq, 2,007 issues fell and 786 advanced.
(Reporting by Ankur Banerjee and Tanya Agrawal in Bengaluru;
Editing by Arun Koyyur)