After failing to sustain an initial move to the upside, stocks have moved sharply lower over the course of the trading session on Tuesday. The major averages have all shown notable drops, with the tech-heavy Nasdaq leading the way lower.
The major averages have seen further downside in recent trading, falling to new lows for the session. The Dow is down 305.51 points or 1 percent at 31,132.75, the Nasdaq is down 253.60 points or 2.2 percent at 11,270.95 and the S&P 500 is down 54.38 points or 1.4 percent at 3,845.73.
The initial strength on Wall Street partly reflected a positive reaction to news that China has cut quarantine times for international travelers in a big step toward easing Covid-19 controls.
The news contributed to strength among travel and casino stocks, with Wynn Resorts (WYNN) and Las Vegas Sands (LVS) showing significant moves to the upside.
Banking stocks also saw early strength after several financial giants, including Morgan Stanley (MS), Goldman Sachs (GS), Bank of America (BAC) and Wells Fargo (WFC), raised their dividends after passing the Federal Reserve’s annual stress tests.
Buying interest waned shortly after the start of trading, however, with lingering concerns about a potential recession continuing to weigh on the markets.
Negative sentiment may also have been generated in reaction to a report from the Conference Board showing U.S. consumer confidence deteriorated to its lowest level in over a year in June.
The Conference Board said its consumer confidence index slid to 98.7 in June from a downwardly revised 103.2 in May. Economists had expected the index to drop to 101.0 from the 106.4 originally reported for the previous month.
With the continued decrease, the consumer confidence index fell to its lowest level since hitting 95.2 in February of 2021.
Retail stocks have moved sharply lower following the disappointing consumer confidence reading, dragging the Dow Jones U.S. Retail Index down by 2.8 percent.
Significant weakness has also emerged among biotechnology stocks, as reflected by the 2.1 percent slump by the NYSE Arca Biotechnology Index.
Pharmaceutical stocks are also seeing considerable weakness on the day, with the NYSE Arca Pharmaceutical Index tumbling by 2 percent.
Computer hardware, semiconductor and gold stocks have also shown notable moves to the downside, while energy stocks are hanging on to strong gains amid a sharp increase by the price of crude oil.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan’s Nikkei 225 Index climbed by 0.7 percent, while China’s Shanghai Composite Index advanced by 0.9 percent.
The major European markets also moved to the upside on the day. While the U.K.’s FTSE 100 Index increased by 0.9 percent, the French CAC 40 Index and the German DAX Index rose by 0.6 percent and 0.4 percent, respectively.
In the bond market, treasuries have bounced back near the unchanged line after seeing early weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 3.196 percent.
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