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The Dow Jones and S&P 500 fell on Tuesday, as worries over the slowing pace of economic recovery overshadowed hopes that the Federal Reserve would maintain its accommodative stance a little longer after a soft U.S. payrolls report.

Amgen Inc and Merck & Co dropped about 2.5% each as the drugmakers dragged down the Dow Jones index, after Morgan Stanley cut its rating on the stocks to “equal-weight” from “overweight”.

Industrial heavyweight Boeing Co also slipped 1.9% after Ireland’s Ryanair said it had ended talks with the planemaker over a purchase of 737 MAX 10 jets worth tens of billions of dollars due to differences over price.

Ten out of eleven sub-indexes fell in early trading with economy-sensitive sectors like industrials, real estate and materials leading declines.

The tech-heavy Nasdaq, however, hit a record high, helped by gains in Amazon.com Inc, Facebook Inc, Apple Inc and Google-owner Alphabet Inc as they generally perform better in a low-interest rate environment.

Markets were shut on Monday for the Labor Day holiday.

“We are entering a time of the year where the market normally corrects and there is so much skepticism among investors that the market is climbing a wall of worry as the prevailing fundamental risks are not having any effect,” said Arthur Weise, chief investment officer at Kingsland Growth Advisors.

Still, the S&P 500 and Nasdaq are up 1.3% and 1.5%, respectively, since Aug. 27 following dovish commentary from Fed Chair Jerome Powell at the Jackson Hole Symposium where he again said that a stable job market was an essential goal for the central bank to start pulling back monetary support.

Easy central bank policies and reopening optimism have pushed the benchmark indexes to record highs over the past few weeks, but concerns over rising Delta coronavirus infections and its impact on the economic recovery could impede the rally.

“The spread of COVID continues to have an impact and we also have the end of extended employment benefits, factors that could possibly act as negative headwinds to the economy going ahead,” Weise said.

At 10:11 a.m. ET, the Dow Jones Industrial Average was down 254.32 points, or 0.72%, at 35,114.77, the S&P 500 was down 18.83 points, or 0.42%, at 4,516.60, and the Nasdaq Composite was down 3.02 points, or 0.02%, at 15,360.50.

Match Group Inc shares jumped 6.9% after the S&P Dow Jones Indices said on Friday the Tinder parent will join the benchmark index, replacing Perrigo Company Plc.

Columbia Property Trust Inc surged 15.7% after Pacific Investment Management Company said it would buy the company for $2.2 billion.

Declining issues outnumbered advancers for a 1.47-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.04-to-1 ratio on the Nasdaq.

The S&P index recorded eight new 52-week highs and one new low, while the Nasdaq recorded 82 new highs and 14 new lows. 

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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