Stocks have climbed off their worst levels of the day but continue to see significant weakness in afternoon trading on Tuesday. The pullback on the day comes on the heels of the strong upward move seen during the previous session.
After falling by more than 500 points earlier in the session, the Dow is down 78.21 points or 0.3 percent at 31,802.03. The tech-heavy Nasdaq is more firmly negative, down 274.52 points or 2.4 percent at 11,260.76, while the S&P 500 is down 45.09 points or 1.1 percent at 3,928.66.
A steep drop by shares of Snap Inc. (SNAP) continues to weigh on the tech sector, with the Snapchat parent plummeting by 41.1 percent to a two-year intraday low.
The plunge by Snap comes after the company warned of weaker than expected second quarter results, saying the “macroeconomic environment has deteriorated further and faster than anticipated.”
Weakness overseas has also carried over onto Wall Street, as a broad package of Chinese measures to support the economy underwhelmed investors.
The pullback also comes amid lingering concerns aggressive interest rate hikes by the Federal Reserve could lead to a recession.
On Wednesday, the Fed is due to release the minutes from its latest monetary policy meeting, which may shed additional light on the outlook for rates.
Adding to the negative sentiment on Wall Street, the Commerce Department released a report showing a much steeper than expected drop in new home sales in the month of April.
The report showed new home sales plunged by 16.6 percent to an annual rate of 591,000 in April after tumbling by 10.5 percent to a revised rate of 709,000 in March.
Economists had expected new home sales to slump 1.7 percent to a rate of 750,000 from the 763,000 originally reported for the previous month.
With the much bigger than expected decrease, new home sales dropped to their lowest annual rate since hitting 582,000 in April of 2020.
Sector News
Airline stocks continue to turn in some of the market’s worst performances on the day, resulting in a 5.1percent nosedive by the NYSE Arca Airline Index.
The disappointing new home sales data is also contributing to considerable weakness among housing stocks, with the Philadelphia Housing Sector Index plunging by 2.7 percent.
Computer hardware stocks have also shown a significant move to the downside on the day, dragging the NYSE Arca Computer Hardware Index down by 2.7 percent.
Semiconductor, brokerage and networking stocks are also seeing considerable weakness, while gold and telecom stocks are bucking the downtrend.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan’s Nikkei 225 Index slid by 0.9 percent, while China’s Shanghai Composite Index plunged by 2.4 percent.
The major European markets also moved to the downside on the day. While the U.K.’s FTSE 100 Index fell by 0.5 percent, the French CAC 40 Index and the German DAX Index tumbled by 1.7 percent and 1.8 percent, respectively.
In the bond market, treasuries have pulled back off their best levels but remain sharply higher. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 10.8 basis points at 2.751 percent.
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