Dow closes down 260 points at session low as megacap tech stocks turn negative
Major U.S. stock indexes wiped out earlier gains and closed at their session lows on Tuesday as Big Tech stocks reversed lower, while data showing housing starts dropped sharply last month also weighed on sentiment.
The Dow Jones Industrial Average ended the session 267.13 points, or 0.8%, to 34,060.66. The S&P 500 fell 0.9% to 4,127.83. The tech-heavy Nasdaq Composite erased a 0.8% gain and slid 0.6% to 13,303.64 as Apple, Amazon, Facebook and Alphabet all rolled over and fell more than 1% on the day.
Housing starts tumbled 9.5% to a seasonally adjusted annual rate of 1.569 million units last month, the Commerce Department said on Tuesday. Economists polled by Dow Jones had forecast starts falling to a rate of 1.7 million units in April.
Investors also digested better-than-expected earnings from big retailers. Walmart shares jumped more than 2% after reporting strong grocery sales and e-commerce growth for the quarter. Macy’s posted a surprise profit and hiked its full-year outlook, but its shares erased earlier gains and dipped 0.4%.
Investors blamed that angst for the S&P 500′s dismal performance last week, which saw the broad market index fall 4% through midweek amid heightened inflation fears. The broad equity benchmark eventually rebounded and ended the week down 1.4%. All three benchmarks posted their worst week since February 26.
The Fed’s minutes from its last meeting, which will be released Wednesday, could offer some clues on policymakers’ thinking on inflation.
Elsewhere, the first-quarter earnings season is wrapping up with more than 90% of the S&P 500 companies having reported their results. So far, 86% of S&P 500 companies have reported a positive EPS surprise, which would mark the highest percentage of positive earnings surprises since 2008 when FactSet began tracking this metric.
Reference: CNBC
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