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Nasdaq, S&P 500 Edge Higher But Dow Extends Pullback

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February 27 2024 11:29AM

Following the modest pullback seen in the previous session, stocks showed a lack of direction over the course of the trading day on Tuesday. The major averages bounced back and forth across the unchanged line before eventually ending the day mixed.

While the Nasdaq (NASDAQI:COMP) climbed 59.05 points or 0.4 percent to 16,035.30 and the S&P 500 (SPI:SP500) edged up 8.65 points or 0.2 percent to 5,078.18, the Dow (DOWI:DJI) dipped 96.82 points or 0.3 percent to 38,972.41.

Uncertainty about the near-term outlook for the markets contributed to the choppy trading on Wall Street following last week’s advance by the Dow and S&P 500 to new record highs.

Traders also stuck to the sidelines ahead of the release of some key economic data later this week, including a closely watched inflation reading.

The Commerce Department’s report on personal income and spending, which is scheduled to be released on Thursday, includes a reading on consumer price inflation said to be preferred by the Federal Reserve.

The inflation data could have a notable impact on the outlook for interest rates, as Fed officials have said they need greater confidence inflation is slowing before cutting rates.

A report released by the Commerce Department before the start of trading showed a substantial decrease by new orders for U.S. manufactured durable goods saw a substantial decrease in the month of January.

The Commerce Department said durable goods orders plunged by 6.1 percent in January after falling by a revised 0.3 percent in December.

Economists had expected durable goods orders to tumble by 4.5 percent compared to the unchanged reading that had been reported for the previous month.

Excluding a steep drop in orders for transportation equipment, durable goods orders dipped by 0.3 percent in January after edging down by 0.1 percent in December. Ex-transportation orders were expected to rise by 0.2 percent.

Meanwhile, the Conference Board released a report showing an unexpected deterioration in U.S. consumer confidence in the month of February.

The Conference Board said its consumer confidence index slid to 106.7 in February from a downwardly revised 110.9 in January.

The decrease surprised economists, who had expected the consumer confidence index to inch up to 115.0 from the 114.8 originally reported for the previous month.

Sector News

Reflecting the lackluster performance by the broader markets, most of the major sectors showed only modest moves on the day.

Airline stocks showed a significant move to the upside, however, with the NYSE Arca Airline Index climbing by 1.3 percent.

Notable strength was also visible among utilities stocks, as reflected by the 1.2 percent gain posted by the Dow Jones Utility Average.

Banking, steel and biotechnology stocks also saw some strength on the day, while gold stocks moved to the downside despite a modest increase by the price of the precious metal.

Other Markets

In overseas trading, stocks across the Asia-Pacific region turned in a mixed performance on Tuesday. China’s Shanghai Composite Index jumped by 1.3 percent, while Japan’s Nikkei 225 Index closed nearly unchanged and South Korea’s Kospi slid by 0.8 percent.

Meanwhile, European stocks moved mostly higher on the day. While the German DAX Index advanced by 0.8 percent and the French CAC 40 Index rose by 0.2 percent, the U.K.’s FTSE 100 Index closed marginally lower.

In the bond market, treasuries closed modestly lower after showing a lack of direction for much of the session. Currently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.6 basis points to 4.315 percent.

Looking Ahead

A revised reading on fourth quarter GDP may attract attention on Wednesday along with remarks by several Federal Reserve officials.