Stocks failed to sustain an initial move to the upside and moved modestly lower over the course of the trading session on Tuesday. With the drop on the day, the major averages pulled back off Monday’s record closing highs.
The major averages ended the day in negative territory but off their lows of the session. The Dow dipped 68.30 points or 0.2 percent to 30,335.67, the Nasdaq fell 49.20 points or 0.4 percent to 12,850.22 and the S&P 500 slipped 8.32 points or 0.2 percent to 3,727.04.
Stocks initially benefited from window dressing, as some fund managers looked to further boost their portfolios going into the end of the year.
The initial advance lifted the major averages to new record intraday highs, although buying interest waned shortly after the start of trading.
Traders subsequently looked to cash in on the recent strength in the markets, leading to the pullback by the major averages.
Traders also kept an eye on the latest developments in Washington after President Donald Trump signed a coronavirus relief and government spending bill over the weekend.
Trump has called for the direct payments included in the bill to be increased to $2,000 from $600, and the House voted Monday to approve a measure increasing the size of the stimulus checks.
However, Senate Majority Leader Mitch McConnell, R-Ken., blocked an effort by Senate Minority Leader Chuck Schumer, D-N.Y., to unanimously approve the House bill.
The choppy trading seen on the day reflected light volume, as many traders remained away from their desks ahead of the New Year’s Day holiday on Friday.
A lack of major U.S. economic data also kept some traders on the sidelines ahead of the release of reports on pending home sales and weekly jobless claims in the coming days.
Networking stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Networking Index down by 1.7 percent. The index pulled back after reaching its best intraday level in almost twenty years.
Considerable weakness was also visible among biotechnology stocks, as reflected by the 1.6 percent drop by the NYSE Arca Biotechnology Index.
Within the biotech sector, shares of Arcturus Therapeutics (ARCT) moved sharply lower as analysts were disappointed by the results of a Phase 1/2 trial of its COVID-19 vaccine candidate.
Tobacco, computer hardware and oil service stocks also moved to the downside on the day, while some strength was visible among pharmaceutical stocks.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan’s Nikkei 225 Index surged up by 2.7 percent, while Hong Kong’s Hang Seng Index jumped by 1 percent.
Meanwhile, the major European markets turned mixed over the course of the session. While the German DAX Index dipped by 0.2 percent, the French CAC 40 Index rose by 0.4 percent and the U.K.’s FTSE 100 Index shot up by 1.6 percent following the long weekend.
In the bond market, treasuries closed nearly unchanged for the second consecutive day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 0.935 percent.
Trading on Wednesday may be impacted by reaction to reports on Chicago-area business activity and pending home sales, although trading activity is likely to remain relatively subdued.
Source: Read Full Article