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Nasdaq Remains Firmly Negative But Dow Edges Slightly Higher

wallstreet july23 21nov22 lt

After coming under pressure early in the session, stocks remain mostly lower in afternoon trading on Monday. The tech-heavy Nasdaq has shown a particularly steep drop on the day after ending last Friday's trading nearly unchanged.

The major averages have regained ground in recent trading, with the Dow peeking above the unchanged line. While the Dow is up 16.62 points or 0.1 percent at 33,762.31, the Nasdaq is down 94.02 points or 0.8 percent at 11,052.04 and the S&P 500 is down 8.61 points or 0.2 percent at 3,956.73.

Concerns about the outlook for the global economy contributed to the early weakness on Wall Street amid a surge in new Covid cases in China.

China reported the death of three people after contracting Covid, marking the first Covid-related deaths that China's mainland has reported since May.

The surge in new cases had led China to impose stringent restrictions in cities like Beijing and Shanghai, shattering recent hopes the country would soon ease Covid curbs.

"Stocks are lower as the global growth picture takes a hit following key China Covid lockdowns and as the US economy could have to deal with a massive rail worker strike before the holidays," said Edward Moya, senior market analyst at OANDA.

He added, "Adding to the risk aversion tone are rising concerns that future Russian attacks on Ukraine's nuclear power supply could be catastrophic.

Selling pressure has waned over the course of the session, however, with some traders likely looking to get a head start on the upcoming Thanksgiving Day holiday."

A lack of major U.S. economic data may also be keeping some traders on the sidelines, although reports on durable goods orders and new home sales are likely to attract attention on Wednesday along with the minutes of the latest Federal Reserve meeting.

Sector News

Energy stocks have climbed well off their worst levels of the day but continue to see considerable weakness on the day, with the Philadelphia Oil Service Index down by 2.4 percent and the NYSE Arca Oil Index down by 1.4 percent.

The price of crude oil moved sharply lower earlier in the day but has rebounded strongly since then. Currently, crude for December delivery is down $0.22 at $79.86 a barrel after hitting a low of $75.08 a barrel.

Significant weakness also remains visible among computer hardware stocks, as reflected by the 2.0 percent slump by the NYSE Arca Computer Hardware Index.

Semiconductor and gold stocks also continue to see notable weakness, while steel and pharmaceutical stocks have moved to the upside on the day.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Monday. China's Shanghai Composite Index fell by 0.4 percent and Hong Kong's Hang Seng Index tumbled by 1.9 percent, although Japan's Nikkei 225 Index bucked the downtrend and edged up by 0.2 percent.

The major European markets also moved to the downside on the day. While the U.K.'s FTSE 100 Index edged down by 0.1 percent, the French CAC 40 Index dipped by 0.2 percent and the German DAX Index slid by 0.4 percent.

In the bond market, treasuries have moved mostly lower over the course of the session after seeing early strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.3 basis points at 3.831 percent.

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