U.S Markets Decline Weighed by Weak Economic Data
The Dow and the S&P 500 slipped on Tuesday as concerns over a new variant of the coronavirus and weak economic readings prompted investors to lock in recent gains, while the Nasdaq was kept in positive territory by Apple.
U.S. home sales fell more than expected in November, while consumer confidence unexpectedly declined this month following a spike in U.S. infections and deaths.
The data added to concerns of further economic disruption from a new coronavirus variant raging in Britain that has pushed the country into effective COVID-19 quarantine.
“You could point to consumer confidence, existing home sales being a little weaker today, but I think it’s broader than that. The market’s a bit overpriced, it’s looking for a reason to back off,” said Kenny Polcari, managing partner at Kace Capital Advisors.
Losses on the technology-heavy Nasdaq were limited by Apple Inc. The index also briefly hit a record high.
Apple rose 2.5% after Reuters exclusively reported that the company was planning a push into vehicle and battery production.
“If the second strain of the coronavirus starts to impact countries again, then that whole work from home trend is going to pick up steam and that’s what’s going on in technology today,” Polcari added.
The S&P 500 technology subsector was the sole gainer among its peers, touching a record high. The sector has vastly outperformed this year thanks to tech’s perceived resilience to virus-related disruptions.
At 12:06 p.m. ET, the Dow Jones Industrial Average was down 121.70 points, or 0.40%, at 30,094.75, the S&P 500 was down 6.97 points, or 0.19%, at 3,687.95, and the Nasdaq Composite was up 16.49 points, or 0.13%, at 12,759.01.
All three major indexes had hit record highs last week in anticipation of a coronavirus stimulus bill. But they were off to a rough start this week after the discovery of the new virus variant, as well as some disappointment over the size of the aid bill approved by Congress.
Still, the indexes were set for strong annual gains, as an initial slump due to the coronavirus was followed by one of the fastest ever recoveries from a bear market by the S&P 500.
Electric-car maker Tesla Inc fell 3.4%, adding to a more than 6% slump in its first day of trading as part of the S&P 500 on Monday.
Amgen Inc fell 2.3% and was among the top drags on the Dow, after it said its experimental asthma drug failed to meet the main goal of a late-stage study.
Peloton Interactive Inc jumped nearly 20% after the exercise bike maker said it would buy peer Precor in a $420 million deal.
Declining issues outnumbered advancers for a 1.17-to-1 ratio on the NYSE, and by a 1.06-to-1 ratio on the Nasdaq.
The S&P index recorded 19 new 52-week highs and no new lows, while the Nasdaq recorded 278 new highs and seven new lows.