Indexes fall with tech shares; trade choppy, Treasury auction weak
Weak demand seen in Treasury auction
Disney shares lower
Indexes down: Dow 0.5%, S&P 500 0.5%, Nasdaq 0.7%
Updates to 2:45 p.m. ET
By Caroline Valetkevitch
NEW YORK, Aug 7 (Reuters) - U.S. stocks were lower in choppy trading on Wednesday afternoon, rising early with technology shares and then falling in tandem with them as investor jitters were stoked by weak demand in a 10-year Treasury auction.
With investors still nervous after a recent steep selloff in global stocks, equities pared early gains further after the Treasury auction . Wall Street then turned red, and the S&P technology index .SPX was last down 0.7%.
"There's just a lot to worry about over the next eight weeks or so, so I'm expecting more voatlilty. I wouldn't be surprised if after a few days of rally you have another small selloff," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.
Investors have been worried about a possible U.S. recession and weaker-than-expected forecasts from U.S. companies.
The Dow Jones Industrial Average .DJI fell 189.15 points, or 0.49%, to 38,808.51, the S&P 500 .SPX lost 23.36 points, or 0.45%, to 5,216.67 and the Nasdaq Composite .IXIC dropped 108.22 points, or 0.66%, to 16,258.63.
"The yield curve and its constant inversion has people on edge and the market has generally been priced for perfection anyway," said Peter Andersen, founder of Andersen Capital Management in Boston.
"When you see any kind of perturbation in the yields on the curve, that causes some pause for investors, especially when there's an auction happening which very sensitive to the current state of the market."
Stocks got early support whenBank of Japan (BOJ) Deputy Governor Shinichi Uchida said the central bank would not raise rates when financial markets are unstable, pushing the yen JPY=EBS lower and boosting market sentiment.
The BOJ'ssurprise rate hike on July 31 to a level unseen in 15 years had sparked a global stocks rout as investors unwound their sharp yen carry trade positions following a surge in the low-yielding currency, widely used for acquiring high-yielding assets.
Walt Disney DIS.N fell 3.3% as it predicted a "moderation in demand" at its theme park business in the coming quarters.
Super Micro Computer SMCI.O lost 20% after it reportedquarterly adjusted gross margins below estimates. Rival Dell Technologies DELL.N dropped 4.9%.
Markets await more commentary on monetary policy from U.S. central bank officials next week, in the run-up to the Jackson Hole, Wyoming, event where Fed Chair Jerome Powell is scheduled to speak.
Declining issues outnumbered advancing ones on the NYSE by a 1.14-to-1 ratio; on Nasdaq, a 1.67-to-1 ratio favored decliners.
The S&P 500 posted 16 new 52-week highs and 6 new lows; the Nasdaq Composite recorded 32 new highs and 157 new lows.
Additional reporting by Shubham Batra and Shashwat Chauhan in Bengaluru; Editing by Sriraj Kalluvila, Shinjini Ganguli and David Gregorio
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
