U.S. Stocks Extending Yesterday’s Pullback In Early Trading
Stocks have moved mostly lower in morning trading on Tuesday, extending the pullback seen in the previous session. The major averages continue to give back ground after ending last Friday’s trading at their best closing levels in over a month.
Currently, the major averages are stuck firmly in negative territory. The Dow is down 393.88 points or 1.7 percent at 23,256.56, the Nasdaq is down 182.74 points or 2.1 percent at 8,377.99 and the S&P 500 is down 54.88 points or 1.9 percent at 2,768.28.
Continued concerns about yesterday’s historic nosedive by crude oil prices are weighing on Wall Street amid worries about the impact on the already hard hit U.S. energy industry.
The price of crude oil for May delivery has shown a notable rebound after plummeting into negative territory for the first time ever on Monday, although later month contracts are seeing further downside.
The May contract for crude oil, which expires today, is currently trading at $2.07 a barrel, up $37.63 from yesterday’s close of negative $37.63 a barrel.
Meanwhile, the much more actively June contract is extending the sell-off seen in the previous session, dropping below $15 a barrel at its lows.
Lingering concerns about the ongoing coronavirus pandemic have also generated some negative sentiment, with President Donald Trump revealing plans to suspend immigration in the U.S. as a result of the outbreak.
“In light of the attack from the Invisible Enemy, as well as the need to protect the jobs of our GREAT American Citizens, I will be signing an Executive Order to temporarily suspend immigration into the United States!” Trump said in a post on Twitter on Monday.
On the U.S. economic front, the National Association of Realtors released a report showing existing home sales pulled back sharply in the month of March.
NAR said existing home sales plunged by 8.5 percent to an annual rate of 5.27 million in March after spiking by 6.3 percent to a revised of 5.76 million in February.
Economists had expected existing home sales to plummet 8.1 percent to a rate of 5.30 million from the 5.77 million originally reported for the previous month.
Among individual stocks, shares of IBM Corp. (IBM) have moved sharply lower after the tech giant reported better than expected first quarter earnings but its revenues missed estimates. IBM also withdrew its full-year guidance.
Software stocks are extending the pullback seen in the previous session, with the Dow Jones U.S. Software Index tumbling by 3.5 percent. The index ended last Friday’s trading at its best closing level in nearly two months.
Considerable weakness has also emerged among semiconductor stocks, as reflected by the 2.7 percent slump by the Philadelphia Semiconductor Index.
Networking, banking, and computer hardware stocks are also seeing significant weakness in morning trading, moving lower along with most of the other major sectors.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan’s Nikkei 225 Index plummeted by 2 percent, while China’s Shanghai Composite Index slid by 0.9 percent.
The major European markets have also shown significant moves to the downside on the day. While the German DAX Index has nosedived by 3 percent, the French CAC 40 Index is down by 2.6 percent and the U.K.’s FTSE 100 Index is down by 2 percent.
In the bond market, treasuries are extending the upward move seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 5.8 basis points at 0.568 percent.
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