logo
Plus   Neg
Share
Email

Profit Taking Contributes To Pullback On Wall Street

wallstreet aug28 02mar21 lt

Stocks moved mostly lower over the course of the trading day on Tuesday, partly offsetting the rally seen in the previous session. The major averages all moved to the downside, with the tech-heavy Nasdaq showing a particularly steep drop.

The major averages came under pressure going into the close, ending the day just off their lows of the session. The Dow fell 143.99 points or 0.5 percent to 31,391.52, the Nasdaq tumbled 230.04 points or 1.7 percent to 13,358.79 and the S&P 500 slid 31.53 points or 0.8 percent to 3,870.29.

Profit taking contributed to the pullback on Wall Street, with some traders cashing in on the strong gains posted during trading on Monday.

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 came despite a continued decrease by the yield on the benchmark ten-year note, which moved 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.

Oil service stocks showed a substantial move to the downside on the day, dragging the Philadelphia Oil Service Index down by 3.4 percent. The index ended Monday's trading at its best closing level in a year.

The sell-off by oil service stocks came amid a notable decrease by the price of crude oil, with crude for April delivery falling $0.89 to $59.75 a barrel.

Considerable weakness was also visible among semiconductor stocks, as reflected by the 3.1 percent slump by the Philadelphia Semiconductor Index.

Networking, biotechnology and software stocks also saw significant weakness on the day, contributing to the steep drop by the Nasdaq.

Meanwhile, gold stocks were among the few groups to buck the downtrend, with the NYSE Arca Gold Bugs Index soaring by 4.2 percent. The index bounced off its lowest closing level in over ten months.

The rebound by gold stocks came as the price of gold for April delivery climbed $10.60 to $1,733.60 an ounce, snapping a five-day losing streak.

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 slumped by 1.2 percent.

Meanwhile, the major European markets moved to the upside over the course of the session. While the German DAX Index edged up by 0.2 percent, the French CAC 40 Index rose by 0.3 percent and the U.K.'s FTSE 100 Index climbed by 0.4 percent.

In the bond market, treasuries climbed firmly into positive territory as the day progressed. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.1 basis points to 1.415 percent.

Looking Ahead

Reports on private sector employment and service sector activity may attract attention on Wednesday along with the Federal Reserve's Beige Book.

For comments and feedback contact: editorial@rttnews.com

Follow RTT