Dow and S&P fall as financials drag; Nasdaq at new high

NEW YORK — The Dow and S&P 500 fell on Tuesday, with financials and other groups closely tied to economic growth leading declines, while the Nasdaq edged higher to another closing record.

The S&P 500 banks index fell 2.5% as US Treasuries rallied, with the 10-year yield hitting its lowest since Feb. 24. Data showed US services industry activity grew at a moderate pace in June, likely restrained by labor and raw material shortages.

The Dow led the day’s declines. Financials sank 1.6%, the biggest weight on the S&P 500 followed by energy shares.

Adding to investor caution, a regulatory crackdown by Beijing drove a sell-off in shares of several US-listed Chinese firms, including Didi Global, Inc.

Alan Lancz, president of Alan B. Lancz & Associates, Inc., an investment advisory firm based in Toledo, Ohio, said with Treasury yields down, “investors may be worried the economy might not be as good as the stock market was showing.”

Also, investors may be taking profits after a strong end of the quarter and string of recent records. “It was such a good quarter end,” he said. Now, “cyclicals are really getting hit.”

The S&P 500 growth index ended up 0.5% after hitting a record high on Tuesday, while the S&P 500 value index fell 1%.

The Dow Jones Industrial Average fell 208.98 points or 0.6% to 34,577.37; the S&P 500 lost 8.80 points or 0.20% to 4,343.54; and the Nasdaq Composite added 24.31 points or 0.17% to 14,663.64.

Last week, all three indexes posted their fifth consecutive quarterly gains. They scaled new highs on Friday.

On Tuesday, the Cboe Volatility Index, an options market gauge of expectations for nearterm volatility, rose 1.37 points to close at 16.44, its highest close in two weeks, highlighting investors’ jangled nerves.

Didi Global shares dropped 19.6% after Chinese regulators ordered over the weekend the company’s app be taken down days after its $4.4-billion listing on the New York Stock Exchange.

The ride-hailing giant’s app was ordered to be removed from mobile app stores in China on Sunday by the Cyberspace Administration

of China (CAC), in order to investigate its findings that the company had illegally collected users’ personal data.

On Monday, the CAC on Monday announced cybersecurity investigations into other China-based companies whose USlisted parents’ shares also slid.

Kanzhun Ltd and Full Truck Alliance were last down 17.4% and 14.3%, respectively.

Extending its actions beyond the tech sector, Beijing also said it would step up supervision of Chinese companies listed offshore in order to crack down on illegal activity and punish fraudulent securities issuance.

Other US-listed Chinese e-commerce firms also fell, including Alibaba Group, down 2.8%, and Baidu, down 5%.

Declining issues outnumbered advancing ones on the NYSE by a 1.86-to-1 ratio; on Nasdaq, a 2.18-to-1 ratio favored decliners.

The S&P 500 posted 49 new 52-week highs and no new lows; the Nasdaq Composite recorded 69 new highs and 75 new lows. Volume on US exchanges was 10.12 billion shares, compared with the 10.8 billion average for the full session over the last 20 trading days. —