U.S. stocks ended with modest losses on Tuesday, with the Dow industrials retreating from the previous session’s record close.
The market felt some pressure from Federal Reserve officials giving fresh warnings about a potential stimulus reduction, as well as from a decline in small-business sentiment.
Joe Bell, senior equity analyst at Schaeffer’s Investment Research, said he views stocks as basically consolidating as third-quarter earnings season winds down.
“It seems like we’re still in the middle of digesting the strong past month or so that we’ve had,” Bell told MarketWatch.
The S&P 500 slipped 4.20 points, or 0.2%, to close at 1,767.69, while the Dow Jones Industrial Average fell 32.43 points, or 0.2%, to end at 15,750.67.
The Nasdaq Composite was essentially unchanged, edging up 0.13 point to 3,919.92.
Today’s market-moving news: Atlanta Fed President Dennis Lockhart said the central bank could cut back on its bond buys as soon as December. Dallas Fed President Richard Fisher also warned about a stimulus reduction, saying “at some point we will have to taper.” Meanwhile, the National Federation of Independent Business reported small-business optimism dropped in October.
What strategists are saying: Regarding the moderate selling, Scott Redler said in an email Tuesday that “some blame” Fisher’s comments on “how we can’t have QE [quantitative easing] forever.” But Redler, chief strategist at T3 Live and T3 Trading Group, added that it “could also just be that we need another day or so to digest Friday’s move and last week’s volatility.” Markets are largely looking past everything this week until Janet Yellen’s nomination hearing on Thursday, said Craig Erlam, market analyst at Alpari U.K., in an email. Yellen is expected to take over leadership of the Federal Reserve.
Other buzz: Stocks have surged enough and are due for a correction, according to a growing number of market observers. Yet others have a different take. Read more about it in this Tell blog post.
What’s the trend:With Tuesday’s losses, the S&P 500 and Dow halted a two-day winning streak. The decline follows a mild move up on Monday, when the Dow achieved a record close, and Friday’s big jump after a stronger-than-expected October jobs report. Last week, the S&P 500 and Dow posted their fifth up week in a row. They have gained about 24% and 20% so far this year, respectively.
Today’s movers & shakers: Dish Network Corp. rose 6% after the satellite TV provider said it swung to a profit in the third quarter. But Rackspace Hosting Inc. tumbled 12% after the cloud-computing company posted third-quarter earnings that missed expectations late Monday. Read more in the Movers & Shakers column.
Other markets:
European stocks mostly lost ground, while Asian equities largely advanced. China‘s Third Plenum finished with Communist Party leaders pledging to allow the market to play a “decisive” role in allocating resources. Gold and crude oil fell, as the dollar rose.
Source : Marketwatch
