U.S. Stocks Move Sharply Lower As Early Buying Interest Evaporates
Stocks showed a substantial move to the downside during trading on Tuesday, coming under pressure after failing to sustain an early upward move. The major averages all moved notably lower, with the tech-heavy Nasdaq posting a particularly steep loss.
The major averages finished the session just off their worst levels of the day. The Dow tumbled 491.27 points or 1.6 percent to 30,936.99, the Nasdaq plummeted 343.01 points or 3 percent to 11,181.54 and the S&P 500 plunged 78.56 points or 2 percent to 3,821.55.
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 moved sharply lower following the disappointing consumer confidence reading, dragging the Dow Jones U.S. Retail Index down by 4 percent.
Substantial weakness also emerged among computer hardware stocks, as reflected by the 2.9 percent nosedive by the NYSE Arca Computer Hardware Index.
Gold stocks also saw considerable weakness amid a modest decrease by the price of the precious metal, with the NYSE Arca Gold Bugs Index plunging by 2.7 percent.
Semiconductor, biotechnology, networking and telecom stocks also showed notable moves to the downside, while energy stocks bucked the downtrend amid a surge 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 0.4percent, respectively.
In the bond market, treasuries recovered from early weakness to end the day little changed. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.2 basis points to 3.206 percent after reaching a high of 3.253 percent.
Remarks by Federal Reserve Chair Jerome Powell are likely to attract attention on Wednesday along with the Commerce Department’s final reading on first quarter GDP.
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