Stocks have moved sharply lower in morning trading on Tuesday, with the major averages all showing significant moves to the downside following the mixed performance seen last Friday. With the drop, the Dow has fallen to its lowest intraday level in almost a month.
Currently, the major averages are just off their lows of the session. The Dow is down 486.18 points or 1.4 percent at 33,340.51, the Nasdaq is down 204.35 points or 1.7 percent at 11,582.92 and the S&P 500 is down 56.39 points or 1.4 percent at 4,022.70.
The sell-off on Wall Street partly reflects ongoing concerns about the outlook for interest rates amid a sharp increase in treasury yields.
The ten-year yield has more than offset the dip seen last Friday, reaching its highest intraday level in over three months.
Recent economic data has led to worries the Federal Reserve may raise rates higher than currently anticipated and keep rates at an elevated level for an extended period.
On Wednesday, the Fed is scheduled to release the minutes of its latest monetary policy meeting, which could shed additional light on the outlook for interest rates.
Geopolitical concerns are also weighing on the markets after Russian President Vladimir Putin said he is suspending Russia’s participation in a nuclear arms treaty with the U.S.
The announcement by Putin comes after U.S. President Joe Biden made a surprise visit to Ukraine’s capital Kyiv on Monday.
Home improvement retailer Home Depot (HD) is leading the Dow lower after reporting fourth quarter sales that missed analyst estimates and providing a downbeat forecast.
Sector News
Housing stocks have moved sharply lower in morning trading, dragging the Philadelphia Housing Sector Index down by 2.7 percent.
The sell-off by housing stocks comes following the release of a report from the National Association of Realtors unexpectedly showing a continued decrease in U.S. existing home sales in the month of January.
Substantial weakness is also visible among airline stocks, as reflected by the 2.3 percent nosedive by the NYSE Arca Airline Index. The index has plunged to its lowest intraday level in well over a month.
Retail stocks are also seeing considerable weakness, resulting in a 2.2 percent slump by the Dow Jones U.S. Retail Index.
Tobacco, telecom and banking stocks have also shown notable moves to the downside amid broad based weakness on Wall Street.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday. Japan’s Nikkei 225 Index dipped by 0.2 percent, while China’s Shanghai Composite Index climbed by 0.5 percent.
Meanwhile, the major European markets have all moved to the downside on the day. While the U.K.’s FTSE 100 Index is down by 0.4 percent, the French CAC 40 Index and the German DAX Index are both down by 0.5 percent.
In the bond market, treasuries have once again come under pressure after ending last Friday’s trading modestly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price is up by 9 basis points at 3.918 percent.
Source: Read Full Article