Breaking News
0

Stocks - S&P Pulls Back After Three Days of Wins

Stock MarketsAug 20, 2019 05:39PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

Investing.com - After three days that produced big gains, stocks pulled back on Tuesday.

The S&P 500 fell 0.8%. The Dow dropped 0.7% and the Nasdaq Composite slid 0.7%.

The easy explanation - also a likely one - is that investors decided to cash in recent gains to see what will happen next. The risks to the market haven't gone away, and investors showed their concerns with a wave of selling in the last 15 minutes of trading.

In addition, interest rates moved lower, a signal of demand for lower-risk assets. The 10-Year Treasury yield fell to 1.552% from Monday's 1.598%. The 10-2 Year Treasury Yield Spread narrowed to 4.32 basis points from Monday's 5.58 basis points.

The spread actually went negative last week, seen by many investors as a signal a recession might be ahead. That caused markets to slump badly on Wednesday, with the Dow off 800 points. President Donald Trump suggested the administration might cut rates on payroll taxes to support the economy.

While the president has insisted the economy is strong, he also called on the Federal Reserve to cut its key interest rate by 100 basis points. The Fed cut its federal fund rates by a quarter point on July 31. Minutes from that Fed Meeting will be released Wednesday afternoon and will offer a look at how the central bank views the economy.

The Fed is expected to vote for another rate cut at its Sept. 18 meeting.

With Tuesday's selling, the major averages remain 4% or more below their peaks reached in July. The S&P 500 is off 4.2% from its July high. The Dow is down 5.2%

The Nasdaq is off 4.7%, with the Nasdaq 100 index down 4.52%. The Nasdaq 100 was off 0.71% on the day.

An additional factor that probably came into play -- many investors and money managers go on vacation in the last two weeks of August, which reduces trading volumes and can boost volatility.

“For some time, we have been concerned that investors were too reliant on Fed rate cuts and too complacent about the prospects for a China trade deal, and we are now seeing the market waking up to these risks," wrote David Spika, president of GuideStone Capital Management, in a Tuesday note. "There is way too much uncertainty to be near-term bullish today,"

Tech shares were held back (with Apple (NASDAQ:AAPL) an exception) by a Wall Street Journal report that as many as 20 states attorneys general will launch a joint antitrust investigation of large technology companies.

Apple's gain was tiny, just 1 cent to $210.36. It was one of 24 Nasdaq 100 stocks that were higher Tuesday and one of just three Dow stocks to see gains on the day.

The Dow was led by Home Depot (NYSE:HD), whose earnings beat analysts' estimates. Shares were up 4.4% as a result. But the company injected some notes of worry. Lumber prices were lower, the company warned, and it's worried about the impact of higher tariffs on many home-improvement products.

The third Dow winner was United Technologies (NYSE:UTX), up just 3 cents.

Oil prices were basically flat, with West Texas Intermediate crude down a penny at $56.13. Brent crude added 29 cents to $60.03 a barrel.

U.S. energy stocks, particularly oil-and-gas production and oil services companies, struggled.

Retail stocks were hit, particularly Macy’s (NYSE:M) and Nordstrom (NYSE:JWN). Nordstrom reports fiscal-second-quarter earnings after Wednesday's close. Macy's quarterly results last week were badly received, with shares falling 10% in a day. Nordstrom shares are down 45% this year and 20% since June 28.

Adding to the unease in U.S. markets were worries about slow growth in Europe and a growing political crisis in Italy after its prime minister resigned.

Winners and Losers in the S&P 500

Home Depot (NYSE:HD), defense contractor Raytheon (NYSE:RTN), home-improvement retailer Lowe’s Companies (NYSE:LOW) and medical-equipment company Medtronic (NYSE:MDT) were among the top S&P 500 performers.

Discount retailer Kohl's (NYSE:KSS), chemical-maker Dow Inc. (NYSE:DOW), Macy’s (NYSE:M) and food processor ConAgra Foods (NYSE:CAG) were among the worst S&P 500 performers.

Stocks - S&P Pulls Back After Three Days of Wins
 

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments
Peter Dee
Peter Dee Aug 20, 2019 6:58PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Month of August, 5 hr chart, lower highs lower lows....Am I Too Long Term ? New bettors from ten years on ....don't know what ABYSS is.
Tomas Hood
Tomas Hood Aug 20, 2019 5:41PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Gold and Precious metals are often neglected in a trading day's review. Yet, in light of investors moving money into safety, gold and possibly other precious metals should be reviewed, especially now with uncertainty.
Johnnie Blaze
Johnnie Blaze Aug 20, 2019 4:37PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
How do Friday and Monday equate to 3 days?!?
Lek Yan
Lek Yan Aug 20, 2019 4:37PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Last 3 trading days were up, which were last Thu, Fri, yesterday(Mon)!
Npm Scoots
Npm Scoots Aug 20, 2019 4:37PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Bruh
Johnnie Blaze
Johnnie Blaze Aug 20, 2019 4:37PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Sorry, the title is just wrong. Gaining less than a 1/4 of a percentage last Thurs does not equate to a big rally by anybody's standards.
Johnnie Blaze
Johnnie Blaze Aug 20, 2019 4:37PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
As a matter of fact they just changed the title to wins.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email