Stocks moved to the upside in early trading on Tuesday but have come under pressure over the course of the session. The major averages have pulled back well off their early highs and into negative territory, with the tech-heavy Nasdaq leading the way lower.
Currently, the major averages are off their lows of the session but still firmly negative. The Nasdaq is down 159.31 points or 0.9 percent at 18,343.37, the Dow is down 191.97 points or 0.5 percent at 42,873.25 and the S&P 500 is down 21.09 points or 0.4 percent at 5,838.76.
The pullback on Wall Street may partly reflect profit taking, as some traders look to cash in on recent strength in the markets.
The Dow and the S&P 500 reached record closing highs on Monday, with the Dow closing above 43,000 for the first time. The Nasdaq is also closing in on the record highs set in July.
A steep drop by shares of UnitedHealth (UNH) is weighing on the Dow, as the health insurance giant is plunging by 7.2 percent.
The nosedive by UnitedHealth comes after the company reported third quarter results that beat expectations but lowered the top end of its full-year earnings guidance.
Financial giant Citigroup (C) has also shown a notable move to the downside despite reporting better than expected third quarter results.
Meanwhile, shares of Walgreens Boots Alliance (WBA) have skyrocketed by 17.1 percent after the drugstore chain reported fiscal fourth quarter results that exceeded estimates and announced plans to close roughly 1,200 stores over the next three years.
Bank of America (BAC) is also posting a notable gain after reporting better than expected third quarter earnings.
On the U.S. economic front, the Federal Reserve Bank of New York released a report showing regional manufacturing activity has returned to contraction in the month of October.
The New York Fed said its general business conditions index tumbled to a negative 11.9 in October from a positive 11.5 in September, with a negative reading indicating contraction. Economists had expected the index to decrease to a positive 2.3.
Despite the downturn in October, the New York Fed said optimism about the six-month outlook grew strongly, with the index for future business activity jumping to a multi-year high of 38.7 in October from 30.6 in September.
Sector News
Semiconductor stocks have moved sharply lower over the course of the session, dragging the Philadelphia Semiconductor Index down by 4.0 percent.
A steep drop by the price of crude oil is also contributing to substantial weakness among energy stocks, with the Philadelphia Oil Service Index and the NYSE Arca Oil Index tumbling by 3.0 percent and 2.8 percent, respectively.
On the other hand, telecom stocks have shown a strong move to the upside, resulting in a 1.9 percent jump by the NYSE Arca North American Telecom Index.
Interest rate-sensitive utilities, commercial real estate and housing stocks are also seeing considerable strength on the day.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance on Tuesday. Japan’s Nikkei 225 Index climbed by 0.8 percent, while China’s Shanghai Composite Index tumbled by 2.5 percent and Hong Kong’s Hang Seng Index plunged by 3.7 percent.
The major European markets are also mixed on the day. While the German DAX Index is up by 0.2 percent, the U.K.’s FTSE 100 Index is down by 0.3 percent and the French CAC 40 Index is down by 0.9 percent.
In the bond market, treasuries are extending the modest rebound seen during last Friday’s session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.2 basis points at 4.039 percent.
Business News
U.S. Stocks Come Under Pressure After Seeing Early Strength
2024-10-15 14:57:40
