S&P 500 slips in choppy trade as energy, financials tumble
Reuters
Published Mar 23, 2021 07:20AM ET
Updated Mar 23, 2021 03:00PM ET
By Herbert Lash
NEW YORK (Reuters) -The S&P 500 edged lower on Tuesday in seesaw trade on sliding financial and energy stocks that have benefitted recently from a sharp rise in market interest rates, while beaten-down tech stocks rebounded in a reversal of trends the past few days.
Rates edged lower as Federal Reserve Chair Jerome Powell told U.S. lawmakers that a coming round of post-pandemic price hikes will not fuel a destructive breakout of persistent inflation - fears that had driven a recent spike in yields.
Oil prices that slumped more than 3% on worries that new pandemic curbs and slow vaccine rollouts in Europe will slow a recovery in demand also pushed the energy sector lower. [O/R]
Falling yields on 10-year U.S. Treasury notes from a 14-month high set last week have deflated this year's outperformance in the financial and energy sectors.
Conversely, technology-related shares that had recently declined sharply on the rising rate environment have recuperated a bit as yields eased, said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.
"A lot of these (tech) stocks have seen 10% to 20% corrections and interest rates have backed off a bit," Tuz said. "The money seems to be going back into them and out of the groups that did extremely well the last three months, specifically financials and energy."
The benchmark S&P 500 and the blue-chip Dow have rallied about 79% from their pandemic lows hit exactly a year ago, while the tech-heavy Nasdaq has doubled in value.
The CBOE volatility index eased to its lowest level in 13 months.
"We've seen a very quick movement in (yields) on mostly fears around inflation and the market is taking a pause here over the last week," said Jon Adams, senior investment strategist at BMO Global Asset Management in Chicago.
By 2:36 p.m. EDT, the Dow Jones Industrial Average fell 126.85 points, or 0.39%, to 32,604.35, the S&P 500 lost 5.46 points, or 0.14%, to 3,935.13 and the Nasdaq Composite dropped 30.45 points, or 0.23%, to 13,347.09.
Growth stocks, which include technology shares, rose 0.4% while underpriced value stocks fell 0.9%.
Shares of GameStop Corp (NYSE:GME) dropped 4.1% ahead of the company's fourth-quarter results due after markets close. The videogame retailer announced the exit of its chief customer officer in the latest sign of a broader overhaul into an e-commerce firm.
ViacomCBS (NASDAQ:VIAC) Inc tumbled about 5% after the media firm launched $3 billion stock deals to raise capital for investments in streaming.
U.S.-listed shares of Chinese internet search provider Baidu Inc (NASDAQ:BIDU) slid 1.5% following a flat Hong Kong debut as investors were wary of a fundraising flurry in the city and questioned the company's growth plans.
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Declining issues outnumbered advancing ones on the NYSE by a 2.70-to-1 ratio; on Nasdaq, a 4.33-to-1 ratio favored decliners.
The S&P 500 posted 11 new 52-week highs and no new lows; the Nasdaq Composite recorded 43 new highs and 71 new lows.
Written By: Reuters
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