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U.S. Stocks Giving Back Ground Following Yesterday's Rally

wallstreet aug29 02mar21 lt

Stocks have moved mostly lower over the course of morning trading on Tuesday after showing a lack of direction early in the session. The major averages have all moved to the downside, with the tech-heavy Nasdaq showing a notable drop.

In recent trading, the major averages have fallen to new lows for the session. The Dow is down 130.45 points or 0.4 percent at 31,405.06, the Nasdaq is down 124.67 points or 0.9 percent at 13,464.16 and the S&P 500 is down 21.39 points or 0.6 percent at 3,880.43.

Profit taking has contributed to the pullback on Wall Street, with some traders cashing in on the strong gains in the previous session.

The S&P 500 posted its biggest single-day gain since last June on Monday, while the Dow and the Nasdaq also moved sharply higher following the starkly mixed performance seen last Friday.

The weakness on the day comes despite a continued decrease by the yield on the benchmark ten-year note, which is moving lower for the third straight session.

The ten-year yield spiked above 1.6 percent last Thursday, raising concerns about the outlook for interest rates despite the Federal Reserve's assurances monetary policy will remain unchanged for the foreseeable future.

Biotechnology stocks are seeing considerable weakness on the day, resulting in a 1.7 percent drop by the NYSE Arca Biotechnology Index.

Vaccine development company Novavax (NVAX) is posting a steep loss after reporting a wider than expected fourth quarter loss.

Notable weakness is also visible among semiconductor stocks, as reflected by the 1.3 percent drop by the Philadelphia Semiconductor Index.

On the other hand, gold stocks have shown a strong move to the upside, with the NYSE Arca Gold Bugs Index climbing by 1.5 percent. The index is bouncing off its lowest closing level in over ten months.

The rebound by gold stocks comes amid a modest increase by the price of the precious metal, as gold for April delivery is edging up $2.70 to $1,725.70 an ounce.

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 slumped by 1.2 percent.

Meanwhile, the major European markets have moved to the upside over the course of the session. While the German DAX Index has risen by 0.4 percent, the French CAC 40 Index is up by 0.5 percent and the U.K.'s FTSE 100 Index is up by 0.8 percent.

In the bond market, treasuries have pulled back off their best levels but remain positive. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.7 basis points at 1.429 percent.

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