U.S. Stocks Slide as Tech Shares Retreat
By Will Horner
U.S. stocks ticked down Tuesday, as technology stocks weighed on
The S&P 500 slid 1%. The benchmark advanced 0.3% on Monday,
despite declines in giant technology stocks. The technology-heavy
Nasdaq Composite fell 1.7% Tuesday morning. The Dow Jones
Industrial Average declines 0.7%.
The major indexes had been hovering close to record levels as
investors weigh strong economic data and robust corporate earnings
against inflation concerns and rising coronavirus cases in parts of
the world. Some money managers say brightening prospects for the
economy and for businesses' profits has been baked into stocks'
"The market has already priced in a strong recovery and earnings
season over-delivered, but it was still not enough to drive indexes
much higher, " said Sophie Chardon, cross-asset strategist at
Lombard Odier. "The market is now focusing on the next steps,
especially on policy. The next step will be to see how the Fed
shifts its monetary policy outlook."
The improving economic picture is encouraging some investors to
step up bets on companies that stand to benefit the most from the
recovery. That is leading to a rally in energy and banking stocks,
while technology shares have slowed their gains.
"The rotation trade is back and it will gain momentum over the
next few weeks," said Florent Pochon, head of cross-asset
strategies at French bank Natixis. "As long as central banks stay
dovish and you combine that with the reopening of the economy, then
that should be a perfect dynamic for stocks."
Following the opening bell, Pfizer rose 0.4%. The pharmaceutical
giant reported higher profits partly driven by Covid-19 vaccine
sales. CVS Health rose 2% after lifting its earnings guidance and
reporting higher profits for the quarter.
Under Armor ticked down 1.6% after agreeing to settle a
regulatory claim that it failed to disclose it was pulling forward
orders from future quarters.
Earnings reports from T-Mobile US and Lyft are due after markets
Data on U.S. factory orders, scheduled for 10 a.m. ET, are
likely to show orders rebounded in March from the previous
U.S. government bond yields declined for a third consecutive
day. The 10-year Treasury yield edged down to 1.583%, from 1.606%
on Monday. Bond yields fall when prices rise.
Brent crude, the international oil benchmark, rose 1.8% to
$68.79 a barrel on optimism about recovering demand in the U.S. and
Overseas, the pan-continental Stoxx Europe 600 retreated 0.6%.
In Hong Kong, the Hang Seng Index rose 0.7%. Markets in Japan and
mainland China were closed for public holidays.
-- Amber Burton contributed to this article.
Write to Will Horner at William.Horner@wsj.com
(END) Dow Jones Newswires
May 04, 2021 10:15 ET (14:15 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.