After closing higher for five consecutive sessions, stocks have moved mostly lower during trading on Tuesday. With the drop on the day, the major averages are pulling back off the record closing highs set in the previous session.
Currently, the major averages are all in negative territory, although the tech-heavy Nasdaq is underperforming its counterparts. While the Nasdaq is down 261.81 points or 1.8 percent at 14,578.90, the S&P 500 is down 34.37 points or 0.8 percent at 4,387.93 and the Dow is down 160.36 points or 0.5 percent at 34,983.95.
The pullback on Wall Street may partly reflect uncertainty ahead of the Federal Reserve’s monetary policy announcement on Wednesday.
Traders are likely to pay close attention to the Fed’s statement for any clues the central bank is considering scaling back its asset purchase program.
Tech giants Alphabet (GOOGL), Microsoft (MSFT) and Apple (AAPL) are also among the companies releasing their quarterly results after the close of today’s trading, which may be contributing to some anxiety among traders.
On the earnings front, shares of UPS (UPS) have moved sharply lower after the delivery giant reported second quarter earnings that beat estimates but weaker than expected domestic revenue.
Electric car maker Tesla (TSLA) has also come under pressure despite reporting second quarter results that exceeded analyst estimates.
Meanwhile, shares of General Electric (GE) are seeing modest strength after the conglomerate reported better than expected second quarter results.
Negative sentiment may also have been generated in reaction to reports that the CDC is expected to reverse course and recommend that people vaccinated for the coronavirus resume wearing masks indoors in certain areas.
The revised guidance, which is expected to be announced later today, comes amid the rapid spread of the delta variant of the coronavirus in regions with low vaccination rates.
In economic news, the Commerce Department released a report showing new orders for U.S. manufactured durable goods saw continued growth in the month of June, although the increase came in well below expectations.
The report said durable goods orders climbed by 0.8 percent in June after spiking by an upwardly revised 3.2 percent in May.
Economists had been expecting orders to surge up by 2.1 percent compared to the 2.3 percent jump that had been reported for the previous month.
Excluding orders for transportation equipment, durable goods orders rose by 0.3 percent in June following a 0.5 percent increase in May. Ex-transportation orders were expected to climb by 0.8 percent.
A separate report from the Conference Board showed consumer confidence in the U.S. saw a slight improvement from an upwardly revised level in the month of July.
The Conference Board said its consumer confidence index inched up to 129.1 in July from an upwardly revised 128.9 in June. Economists had expected the index to drop to 124.9 from the 127.3 originally reported for the previous month.
With the unexpected uptick, the consumer confidence index reached its highest level since hitting 132.6 in February of 2020.
Semiconductor stocks have shown a substantial move to the downside on the day, resulting in a 3 percent nosedive by the Philadelphia Semiconductor Index.
Considerable weakness also remains visible among computer hardware stocks, as reflected by the 2.9 percent slump by the NYSE Arca Computer Hardware Index.
Airline stocks are also seeing significant weakness in mid-day trading, with the NYSE Arca Airline Index tumbling by 2.6 percent.
Oil service, software and retail stocks have also shown notable moves to the downside, while tobacco and utilities stocks are bucking the downtrend.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan’s Nikkei 225 Index rose by 0.5 percent, while China’s Shanghai Composite Index plunged by 2.5 percent.
Meanwhile, the major European markets all moved to the downside on the day. While the U.K.’s FTSE 100 Index fell by 0.4 percent, the German DAX Index and the French CAC 40 Index slid by 0.6 percent and 0.7 percent, respectively.
In the bond market, treasuries are seeing some strength amid the pullback on Wall Street. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.7 basis points at 1.239 percent.
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