Nasdaq Leading Pullback On Wall Street Following Recent Strength
After moving mostly higher over the course of the previous session, stocks have moved back to the downside during trading on Tuesday. The major averages have all moved lower, with the tech-heavy Nasdaq showing a notable pullback.
Currently, the major averages are off their lows of the session but still in the red. The Nasdaq is down 115.11 points or 0.8 percent at 14,169.42, the S&P 500 is down 14.73 points or 0.3 percent at 4,532.65 and the Dow is down 57.61 points or 0.2 percent at 35,093.43.
The pullback on Wall Street comes as some traders look to cash in on the recent strength in the markets, which has lifted the major averages to their best levels in over three months.
A negative reaction to some of the latest earnings news from major retailers is also weighing on Wall Street, with shares of American Eagle Outfitters (AEO) plummeting by 17.0 percent.
The steep drop by American Eagle comes even though the apparel and accessories retailer reported fiscal third quarter results that exceeded analyst estimates on both the top and bottom lines.
Department store operator Kohl’s (KSS) has also shown a steep drop after reporting fiscal third quarter revenues that fell short of analyst estimates.
Lowe’s (LOW) and Best Buy (BBY) have also moved to the downside after both companies reported weaker than expected fiscal third quarter revenues and lowered their full-year sales forecasts.
Meanwhile, shares of Dick’s Sporting Goods (DKS) have surged after the sporting goods retailer reported better than expected fiscal third quarter results and raised its full-year guidance.
On the U.S. economic front, the National Association of Realtors released a report showing existing home sales in the U.S. tumbled by much more than expected in the month of October
NAR said existing home sales plummeted by 4.1 percent to an annual rate of 3.79 million in October after plunging by 2.2 percent to a revised rate of 3.95 million in September.
Economists had expected existing home sales to slump by 1.5 percent to a rate of 3.90 million from the 3.96 million originally reported for the previous month.
With the much steeper than expected drop, existing home sales fell to their lowest level since August 2010.
Later in the day, the Federal Reserve is due to release the minutes of its latest monetary policy meeting, which may shed additional light on the outlook for interest rates.
Airline stocks are seeing substantial weakness on the day, with the NYSE Arca Airline Index tumbling by 2.4 percent after ending the previous session at a two-month closing high.
Considerable weakness is also visible among semiconductor stocks, as reflected by the 2.1 percent slump by the Philadelphia Semiconductor Index. The index ended Monday’s trading at its best closing level in well over three months.
Computer hardware and networking stocks are also seeing significant weakness, contributing to the pullback by the tech-heavy Nasdaq.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan’s Nikkei 225 Index edged down by 0.1 percent, while South Korea’s Kospi advanced by 0.8 percent.
The major European markets have also turned mixed on the day. While the German DAX Index is up by 0.1 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index are both down by 0.3 percent.
In the bond market, treasuries have shown a lack of direction after turning higher over the course of the previous session. Currently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.2 basis points at 4.410 percent.
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