U.S. Stocks Once Again Move Lower After Initial Uptick

After showing an initial uptick, stocks have moved mostly lower over the course of morning trading on Tuesday. The major averages have pulled back off their highs of the session and into negative territory.

The major averages have bounced off their lows in recent trading but currently remain in the red. The Dow is down 74.52 points or 0.2 percent at 31,243.92, the Nasdaq is down 82.55 points or 0.7 percent at 11,548.32 and the S&P 500 is up 10.79 points or 0.3 percent at 3,913.47.

Traders initially looked to pick up stocks at reduced levels following recent weakness, but buying interest waned shortly after the start of trading amid lingering concerns about the outlook for interest rates and the global economy.

The subsequent pullback on Wall Street comes amid a surge in treasury yields, with the yield on the benchmark ten-year note jumping to its highest levels in almost three months.

Potentially adding to the worries about interest rates, the Institute for Supply Management released a report showing service sector activity in the U.S. unexpectedly grew at a slightly faster rate in the month of August.

The ISM said its services PMI inched up to 56.9 in August from 56.7 in July, with a reading above 50 indicating growth in the sector. The uptick surprised economists, who had expected the index to dip to 55.1.

The report is a positive sign for the economy but may have led to concerns the Federal Reserve will see the data as an indication that it can continue to aggressively raise interest rates.

Comments from Fed officials, including Chair Jerome Powell, are likely to attract attention in the coming days along with the central bank’s Beige Book.

Networking stocks have moved sharply lower in morning trading, dragging the NYSE Arca Networking Index down by 2.5 percent to its lowest intraday level in over a month.

Considerable weakness has also emerged among computer hardware stocks, as reflected by the 1.9 percent drop by the NYSE Arca Computer Hardware Index. The index has fallen to a nearly two-month intraday low.

Banking stocks have also shown a significant move to the downside on the day, with a 1.8 percent slump by the KBW Bank Index pulling the index down to its lowest intraday level in almost two months.

Airline, brokerage and semiconductor stocks are also seeing notable weakness, while some strength is visible among commercial real estate and pharmaceutical stocks.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. China’s Shanghai Composite Index jumped by 1.4 percent and Japan’s Nikkei 225 Index closed just above the unchanged line, while Australia’s S&P/ASX 200 Index fell by 0.4 percent.

The major European markets have also turned mixed on the day. While the German DAX Index is up by 0.2 percent, the French CAC 40 Index is down by 0.1 percent and the U.K.’s FTSE 100 Index is down by 0.3 percent.

In the bond market, treasuries have pulled back sharply following the rebound seen last Friday. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 13.3 basis points at 3.326 percent.

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