US stocks step back from all-time highs in choppy trading
Wall Street capped a choppy day of trading Tuesday with stock indexes closing mostly lower after coming within striking distance of matching the market’s longest winning streak of the year.
The S&P 500 fell 0.2% after wobbling between small gains and losses most of the day. The modest pullback snapped the benchmark index’s five-day winning streak. A sixth-day of gains would have matched the S&P 500’s longest winning streak so far this year, though the index remains near its all-time high.
Losses by banks, industrial stocks and companies that rely on consumer spending, including cruise line operators, pulled the market lower, outweighing gains by Big Tech and communication services stocks. Energy stocks, the S&P 500’s biggest gainers so far this year, took the brunt of the losses as crude oil prices fell.
Stocks’ uneven finish came as investors continue to closely watch the bond market, with even minute changes in bond yields causing stocks to fluctuate. Bond yields also wavered Tuesday. The 10-year Treasury yield, which influences interest rates on mortgages and other consumer loans, inched up to 1.62%.
“The 10-year is remaining above 1.60%,” said Sam Stovall, chief investment strategist at CFRA. “So, investors are in a sense girding themselves for higher inflation.”
The S&P 500 dropped 6.23 points to 3,962.71. Earlier, it had been up 0.3%.
The Dow Jones Industrial Average lost 127.51 points, or 0.4%, to 32,825.95. The Nasdaq bucked the trend, benefiting from the rally in technology stocks. The tech-heavy index gained 11.86 points, or 0.1%, to 13,471.57.
The big technology names that rose sharply in 2020 were among the gainers Tuesday. Apple rose 1.6%, Google’s parent company added 1.4% and Facebook rose 2%. Tech stocks have moved in tandem with the bond market, so as some bond yields ticked lower on Tuesday, it moved technology stocks in the opposite direction.
Small company stocks lagged the broader market. The Russell 2000 index fell 40.65 points, or 1.7%, to 2,319.52.
Investors weighed new economic data Tuesday that showed Americans cut back on spending last month, partly due to bad weather in parts of the country that kept shoppers away from stores, and partly due to their December and January stimulus payments running out.
Retail sales fell a seasonally adjusted 3% in February from the month before, the U.S. Commerce Department said Tuesday. February’s drop followed soaring sales in January as people spent $600 stimulus checks sent at the end of last year. In fact, the Commerce Department revised its January number upwards to 7.6% from its previously reported rise of 5.3%.
Meanwhile severe winter weather pushed industrial production down a sharp 2.2% in February, reflecting a big decline in factory output.