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U.S. stock markets closed sharply lower on Tuesday following profit bookings in the technology sector. Moreover, investors were concerned following the release of a few weak economic data. Market participants are also waiting for Powell’s Congressional testimony. All three major stock indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) tumbled 1% or 404.64 points to close at 38,585.19. Notably, 23 components of the 30-stock index ended in negative territory and 7 ended in positive zone. The tech-heavy Nasdaq Composite finished at 15,939.59, sliding 1.7% or 267.92 points due to weak performance by technology bigwigs.
The S&P 500 tanked 1% to finish at 5,078.65. Eight out of 11 broad sectors of the broad-market index ended in negative territory while three in positive zone. The Real Estate Select Sector SPDR (XLRE), the Consumer Discretionary Select Sector SPDR (XLY) and the Technology Select Sector SPDR (XLK) decreased 1.3%, 1.2% and 2.5%, respectively.
The fear-gauge CBOE Volatility Index (VIX) was up 1% to 14.46. A total of 13.22 billion shares were traded on Tuesday, higher than the last 20-session average of 11.99 billion. Decliners outnumbered advancers on the NYSE by a 1.40-to-1 ratio. On Nasdaq, a 1.76-to-1 ratio favored declining issues.
Technology Sector Tumbles
Wall Street saw an astonishing rally in 2023 after a highly disappointing 2022. The turnaround of U.S. stock markets was primarily owing to an impressive rally of the technology sector. The high-growth sector soared 56% last year. The tech-heavy index jumped 43.4%, recording its best year since 2020.
Momentum continues in 2024. Year to date, the Nasdaq Composite is up 8% compared with a 7.1% gain of the S&P 500 and 2.3% of the Dow. The Technology Select Sector SPDR (XLK) - one of the 11 broad sectors of the market’s benchmark the S&P 500 Index – has surged 6.8%. The Communication Services Select Sector SPR (XLC) – which is closely linked to the technology sector – has advanced 7.8%. Therefore, profit booking was reasonable in this sector.
The stock price of the technology behemoth Apple Inc. (AAPL - Free Report) tumbled 2.8% following a report by Counterpoint Research that iPhone sales plunged 24% in China during the first six weeks of 2024. iPhone is facing severe competition from Chinese companies like Huawei, Oppo, Vivo and Xiaomi.
The Fed Chairman Jerome Powell will deliver monetary policy updates in his testimony before the House of Representatives on Mar 6 and before the Senate on Mar 7. Market participants will keenly watch his statement in order to derive any clue regarding the movement of the benchmark interest rate in near future. The Fed has already categorically denied any possibility of a rate cut in its upcoming March FOMC meeting.
Economic Data
The Institute of Supply Management reported that services PMI (purchasing managers’ index) in February came in at 52.6, missing the consensus estimate of 53. The metric for January was 53.4. Any reading above 50 indicates expansion of services activities. February was the 14th consecutive months of services sector’s expansion. The new orders index came in at 56.1 in February compared with 55 in January.
Factory orders for January fell 3.6%, higher-than the consensus estimate of a drop of 2.7%. The metric for December was also revised downward to a decline of 0.3% from an increase of 0.2% reported earlier. New orders for manufactured durable goods in January, down 6.2% to $276.3 billion. New orders for manufactured nondurable goods decreased 1.1% to $293.4 billion.
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Stock Market News for Mar 6, 2024
U.S. stock markets closed sharply lower on Tuesday following profit bookings in the technology sector. Moreover, investors were concerned following the release of a few weak economic data. Market participants are also waiting for Powell’s Congressional testimony. All three major stock indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) tumbled 1% or 404.64 points to close at 38,585.19. Notably, 23 components of the 30-stock index ended in negative territory and 7 ended in positive zone. The tech-heavy Nasdaq Composite finished at 15,939.59, sliding 1.7% or 267.92 points due to weak performance by technology bigwigs.
The S&P 500 tanked 1% to finish at 5,078.65. Eight out of 11 broad sectors of the broad-market index ended in negative territory while three in positive zone. The Real Estate Select Sector SPDR (XLRE), the Consumer Discretionary Select Sector SPDR (XLY) and the Technology Select Sector SPDR (XLK) decreased 1.3%, 1.2% and 2.5%, respectively.
The fear-gauge CBOE Volatility Index (VIX) was up 1% to 14.46. A total of 13.22 billion shares were traded on Tuesday, higher than the last 20-session average of 11.99 billion. Decliners outnumbered advancers on the NYSE by a 1.40-to-1 ratio. On Nasdaq, a 1.76-to-1 ratio favored declining issues.
Technology Sector Tumbles
Wall Street saw an astonishing rally in 2023 after a highly disappointing 2022. The turnaround of U.S. stock markets was primarily owing to an impressive rally of the technology sector. The high-growth sector soared 56% last year. The tech-heavy index jumped 43.4%, recording its best year since 2020.
Momentum continues in 2024. Year to date, the Nasdaq Composite is up 8% compared with a 7.1% gain of the S&P 500 and 2.3% of the Dow. The Technology Select Sector SPDR (XLK) - one of the 11 broad sectors of the market’s benchmark the S&P 500 Index – has surged 6.8%. The Communication Services Select Sector SPR (XLC) – which is closely linked to the technology sector – has advanced 7.8%. Therefore, profit booking was reasonable in this sector.
The stock price of the technology behemoth Apple Inc. (AAPL - Free Report) tumbled 2.8% following a report by Counterpoint Research that iPhone sales plunged 24% in China during the first six weeks of 2024. iPhone is facing severe competition from Chinese companies like Huawei, Oppo, Vivo and Xiaomi.
Aside from Apple, shares of tech giants like Microsoft Corp. (MSFT - Free Report) and Intel Corp. (INTC - Free Report) tanked 3% and 5.4%, respectively. Microsoft currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Powell’s Testimony
The Fed Chairman Jerome Powell will deliver monetary policy updates in his testimony before the House of Representatives on Mar 6 and before the Senate on Mar 7. Market participants will keenly watch his statement in order to derive any clue regarding the movement of the benchmark interest rate in near future. The Fed has already categorically denied any possibility of a rate cut in its upcoming March FOMC meeting.
Economic Data
The Institute of Supply Management reported that services PMI (purchasing managers’ index) in February came in at 52.6, missing the consensus estimate of 53. The metric for January was 53.4. Any reading above 50 indicates expansion of services activities. February was the 14th consecutive months of services sector’s expansion. The new orders index came in at 56.1 in February compared with 55 in January.
Factory orders for January fell 3.6%, higher-than the consensus estimate of a drop of 2.7%. The metric for December was also revised downward to a decline of 0.3% from an increase of 0.2% reported earlier. New orders for manufactured durable goods in January, down 6.2% to $276.3 billion. New orders for manufactured nondurable goods decreased 1.1% to $293.4 billion.