U.S. Stocks Finish Lackluster Session Modestly Lower

wallstreet aug15 28mar23 lt

After turning in a lackluster performance early in the session, stocks moved mostly lower over the course of the trading day on Tuesday. The major averages all moved to the downside after ending Monday's trading mixed.

The major averages climbed off their worst levels going into the close but remained in the red. While the tech-heavy Nasdaq fell 52.76 points or 0.5 percent to 11,716.08, the S&P 500 dipped 6.26 points or 0.2 percent to 3,971.27 and the Dow edged down 37.83 points or 0.1 percent to 32,394.25.

The weakness that emerged on Wall Street partly reflected ongoing concerns about the outlook for interest rates amid a continued increase in treasury yields.

Following the substantial rebound seen on Monday, the ten-year yield climbed further off last Friday's six-month closing low.

Trading activity remained relatively subdued, however, as traders await additional news out of the banking sector as well as some key U.S. economic data later in the week.

Friday's report on personal income and spending in the month of February is likely to be in focus, as it includes a reading on inflation said to be preferred by the Federal Reserve.

With the Fed signaling last week that it expects just one more interest rate increase this year, traders will look to the data for clues about the timing of the final rate hike.

CME Group's FedWatch Tool currently indicates a 59.4 percent chance the Fed will leave rates unchanged at its next meeting in early May and a 40.6 percent chance of a 25 basis point increase.

On the U.S. economic front, the Conference Board released a report unexpectedly showing a slight improvement in U.S. consumer confidence in the month of March.

The Conference Board said its consumer confidence index inched up to 104.2 in March from an upwardly revised 103.4 in February.

The modest increase surprised economists, who had expected the consumer confidence index to slip to 101.0 from the 102.9 originally reported for the previous month.

Sector News

Despite the weakness shown by the broader markets, energy stocks extended Monday's rally amid a continued increase by the price of crude oil.

With crude for May delivery rising $0.39 to $73.20 a barrel, the Philadelphia Oil Service Index spiked by 2.8 percent and the NYSE Arca Oil Index jumped by 1.9 percent.

Considerable strength was also visible among gold stocks, as reflected by the 2.4 percent surge by the NYSE Arca Gold Bugs Index. A notable increase by the price of gold contributed to the strength in the sector.

Airline and steel stocks also saw notable strength on the day, while semiconductor stocks pulled back further off their recent highs.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index edged up by 0.2 percent, while Hong Kong's Hang Seng Index jumped by 1.1 percent.

Meanwhile, the major European markets saw modest strength on the day. While the U.K.'s FTSE 100 Index crept up by 0.2 percent, the German DAX Index and the French CAC 40 Index both inched up by 0.1 percent.

In the bond market, treasuries extended the sharp pullback seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.6 basis points at 3.564 percent.

Looking Ahead

A report on pending home sales may attract some attention on Wednesday, although trading activity may remain somewhat subdued ahead of the release of more closely watched data later in the week.

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