Dow Hits Record as Chip Stocks Extend Rout; Nasdaq Drops 0.8%

U.S. stocks finished mixed on July 2 as semiconductor shares extended their selloff and investors rotated into other sectors.

The Dow Jones Industrial Average rose 594.83 points, or 1.14%, to 52,900.07. The S&P 500 added 0.01 point to 7,483.24, while the Nasdaq Composite fell 207.36 points, or 0.80%, to 25,832.67.

The Dow closed at a record high.

Semiconductor stocks posted a second straight day of steep losses. The Philadelphia Semiconductor Index fell 5.45%.

Micron Technology, the memory-chip maker, dropped another 5.49% after tumbling 10.57% the previous day.

Nvidia also fell for a second straight session, shedding more than 1%.

Broadcom lost 2.41%, AMD fell 4.26%, Intel dropped 5.25% and Marvell Technology sank 9.84%.

Tesla slumped 7.49%. Although its second-quarter vehicle deliveries beat market expectations, the stock appeared to come under profit-taking pressure after climbing 13.38% over the previous four trading sessions through July 1.

Money leaving technology stocks moved into defensive shares. Consumer staples names including Walmart, up 2.78%, Costco, up 2.92%, Coca-Cola, up 3.51%, and Procter & Gamble, up 2.70%, all advanced. Pharmaceutical stocks also gained, with Eli Lilly up 1.86%, Johnson & Johnson up 3.57%, AbbVie up 3.99% and Merck up 3.34%.

Labor data released on July 2 missed expectations. U.S. nonfarm payrolls rose by 57,000 in June from the previous month, far below the 115,000 increase expected by Wall Street economists surveyed by Dow Jones.

CME Group's FedWatch showed the probability that the Federal Reserve will leave interest rates unchanged through December rose to 23% from 17% a day earlier. The odds of one rate increase fell to 77% from 83%.

Han Kyung-woo, Hankyung.com reporter case@hankyung.com