Markets ended mostly lower on Tuesday, as investors continued to worry about rising interest rates and higher bond yields. Also, fears of slowing global economic growth dented investor sentiment after the International Monetary Fund cut forecasts for 2018 and 2019. The IMF also reduced 2019 estimates for the United States and China, citing growing trade tensions between the two countries. The S&P 500 recorded a four-day losing streak. However, the Nasdaq snapped a three-day losing streak, led by a rebound in tech stocks.
The Dow Jones Industrial Average (DJI) declined 0.2%, to close at 26,430.57. The S&P 500 fell 0.1% to close at 2,880.34. The Nasdaq Composite Index closed at 7,738.02, advancing 0.03%. A total of 7.26 billion shares were traded on Tuesday, lower than the last 20-session average of 7.27 billion shares. Decliners outnumbered advancers on the NYSE by a 1.13-to-1 ratio. On Nasdaq, a 1.51-to-1 ratio favored declining issues.
How did the Benchmark Perform?
The Dow shed 56.21 points, with shares of United Technologies Corporation (UTX – Free Report) and DowDuPont Inc. (DWDP – Free Report) taking a hit. Shares of United Technologies and DowDuPont declined 2.7% and 3.7%, respectively. The index at its session low had fallen 162.62 points.
The S&P 500 fell 4.09 points, led by a decline in materials sector. The Materials Select Sector SPDR (XLB) declined 3.3%, while the Industrial Select Sector SPDR (XLI) fell 1.5%. Shares of PPG Industries, Inc. (PPG – Free Report) declined 10.1%. Also, the S&P 500 fell below its 50-day moving average before rebounding to close above it, suggesting that it could also serve as a support level. The S&P 500 hasn’t closed below this metric since July.
The tech heavy Nasdaq added 2.07 points, snapping its three-day losing streak, led by a rally in tech stocks. Shares of Apple (AAPL – Free Report) and Netflix (NFLX – Free Report) increased 1.4% and 1.9%, respectively. Shares of Amazon.com, Inc. (AMZN – Free Report) and Facebook, Inc. (FB – Free Report) advanced 0.3% and 0.4%. Apple has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Investors Continue to Worry About Rising Interest Rates
Rising interest rates have been rattling markets since last week. So much so, that they even overshadowed robust economic data. The trend continued on Tuesday as well. The 10-Year Treasury yield rose to its highest level since 2011, before slipping. Also the long-term 30-year bond yield reached its highest level since 2014.
Moreover, comments from top Fed official also helped boost rates. Higher yields equate to higher borrowing costs for both companies and investors. This is leading to a reassessment in equity valuation leading to huge selloffs.
Concerns of Slowing Global Economic Growth Unsettle Markets
The International Monetary Fund cut its global growth forecast to 3.7% for both 2018 and 2019, according to the quarterly Economic Outlook Report Outlook, issued on Monday. The new forecast is 0.2% lower than its prior forecast made in July for both the years.
The new forecast reflects weaker growth in major economies, higher oil prices and increasing trade tensions. Also, the IMF cut its estimates for the United States and China for 2019, citing that trade war would impact both the countries in the coming year. This made investors jittery leading to huge selloffs.
Stocks That Made Headlines
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