NEW YORK: The S&P 500 eased on Monday, although it remained 0.5% away from its all-time high, as a deal by the world’s richest nations on a global minimum corporate tax overshadowed bets on a full economic reopening.
The Group of Seven (G7) advanced economies agreed on Saturday to back a minimum global corporate tax rate of at least 15%, squeezing more money out of multinational companies such as Amazon.com and Google.
But analysts said immediate market implications would be minimal since the details remained to be negotiated over the coming months.
Shares of Apple Inc, Amazon.com Inc, Facebook Inc and Google-parent Alphabet Inc were trading flat to slightly lower, in line with the broader market’s move.
“While it all sounds good, the road to implementation (of the tax deal) is full of rocks and potholes,” said Ken Polcari, managing partner at Kace Capital Advisors. “I would not react by becoming a seller in any of these names on this headline just yet.”
US stocks ended higher on Friday after a tepid US monthly jobs report relieved investors concerned about the Federal Reserve scaling back its massive stimulus program sooner than expected.
The benchmark S&P 500 is inches away from its record highs hit earlier in May as investors shift focus to May’s consumer price data due on Thursday to assess inflationary patterns in the economy.
“There is no bearishness in the market, but the question among investors is - with all the optimism from economic reopening already been factored in, where the next push for growth would come from?” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.
Carnival Corp said it would restart its namesake cruise line trips from US ports this summer, while Norwegian Cruise Line Holdings Ltd outlined a plan to add more trips from multiple US ports. Their shares added 2.5% and 3.5%, lifting peer Royal Caribbean by 1.8%.
At 11:50 a.m. ET, the Dow Jones Industrial Average was down 131.48 points, or 0.38%, at 34,624.91 and the S&P 500 was down 13.04 points, or 0.31%, at 4,216.85. The Nasdaq Composite was up 5.89 points, or 0.04%, at 13,820.38. Seven of the 11 major S&P sectors slipped. The defensive utilities, real estate and healthcare sectors were in the green.
Cinema operator AMC Entertainment added 18.8% after racking up a near 200% rise in the past two weeks, driven by retail investors. Other “meme stocks” including GameStop and US-listed shares of BlackBerry rose 10.6% and 14.1%.
GameStop shares were the biggest boost to the S&P 600 small-cap index, which was up 0.6%.
US regulators approved Biogen Inc’s aducanumab as the first treatment to address an underlying cause of Alzheimer’s disease. Its shares remained halted by noon.
Chipmakers lagged on concerns about prolonged Covid-19 curbs in Taiwan hitting production of semiconductors further. The Philadelphia semiconductor index dropped 1.1%.
Advancing issues outnumbered decliners by a 1.15-to-1 ratio on the NYSE and by a 1.69-to-1 ratio on the Nasdaq.
The S&P index recorded 54 new 52-week highs and no new low, while the Nasdaq recorded 124 new highs and 15 new lows.
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