With trading resuming following the long Christmas weekend, stocks moved mostly lower during trading on Tuesday. The tech-heavy Nasdaq showed a particularly steep drop, tumbling to its lowest closing level in well over a month.
The Nasdaq plunged 144.64 points or 1.4 percent to 10,353.23 and the S&P 500 fell 15.57 points or 0.4 percent to 3,829.25. Meanwhile, the narrower Dow inched up 37.63 points or 0.1 percent to 33,241.56.
The weakness on Wall Street partly reflected lingering concerns about the economic outlook following recent indications the Federal Reserve plans to continuing raising interest rates.
Trading activity was relatively subdued, however, as some traders remained away from their desks following the long Christmas weekend.
A light economic calendar also kept traders on the sidelines, although reports on pending home sales, weekly jobless claims and Chicago-area business activity may attract attention in the coming days.
Airline stocks moved sharply lower on the day, with the NYSE Arca Airline Index plunging by 2.3 percent amid continued flight cancellations due to the severe winter storm.
Southwest Airlines (LUV) posted a steep loss following news the Department of Transportation is investigating the company’s “unacceptable rate of cancellations.”
Biotechnology and semiconductor stocks also saw significant weakness, contributing to the sharp drop by the tech-heavy Nasdaq.
Reflecting the weakness in the sectors, the NYSE Arca Biotechnology Index and the Philadelphia Semiconductor Index slid by 1.9 percent and 1.8 percent, respectively.
On the other hand, gold stocks moved sharply higher on the day, driving the NYSE Arca Gold Bugs Index up by 2.5 percent.
The rally by gold stocks came amid a notable increase by the price of the precious metal, with gold for February delivery climbing $18.90 to $1,823.10 an ounce.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Tuesday, with several markets still closed for holidays. Japan’s Nikkei 225 Index inched up by 0.2 percent, while China’s Shanghai Composite Index jumped by 1.0 percent.
The major European markets also moved to the upside on the day. While the U.K. markets remained closed, the German DAX Index rose by 0.4 percent and the French CAC 40 Index climbed by 0.7 percent.
In the bond market, treasuries moved sharply lower, extending the downward trend seen over the past several sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 10.9 basis points to 3.860 percent.
A report on pending home sales may attract some attention on Wednesday, although trading activity is likely to remain relatively subdued.
Source: Read Full Article