U.S. Stocks Turn Lower After Seeing Initial Strength
Stocks have turned lower over the course of morning trading on Tuesday after moving to the upside at the start of the session. The major averages have pulled back into negative territory, with the tech-heavy Nasdaq showing a notable drop.
The major averages have climbed off their worst levels in recent trading but currently remain in the red. The Dow is down 24.13 points or 0.1 percent at 34,814.03, the Nasdaq is down 79.13 points or 0.5 percent at 14,601.94 and the S&P 500 is down 6.67 points or 0.2 percent at 4,380.49.
The pullback on Wall Street has partly been attributed to concerns about the rapid spread of the delta variant of the coronavirus.
Data from the Centers for Disease Control and Prevention has shown a jump in new coronavirus cases in recent weeks, with the seven-day moving average of new cases reaching 72,790 last Friday, surpassing the peak seen last summer.
The surge in new coronavirus cases has led to renewed lockdowns in some parts of the world, which may add to recent concerns about a slowdown in the pace of the U.S. economic recovery.
However, the increase has also seeming led to more Americans getting vaccinated, with the CDC saying 70 percent of U.S. adults have now received at least one dose of a coronavirus vaccine.
An extended pullback by the price of crude oil is also weighing the markets, with crude for September delivery tumbling $1.75 to $69.51 a barrel after plunging $2.69 to $71.26 a barrel on Monday.
Oil service stocks are moving sharply lower along with the price of crude oil, dragging the Philadelphia Oil Service Index down 2.5 percent.
Transocean (RIG) is leading the sector lower after the offshore drilling contractor reported a wider than expected second quarter loss on revenues that missed analyst estimates.
Considerable weakness is also visible among airline stocks, as reflected by the 2 percent slump by the NYSE Arca Airline Index.
Financial stocks have also moved to the downside on the day, while some strength is visible among gold and utilities stocks.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan’s Nikkei 225 Index and China’s Shanghai Composite Index both fell by 0.5 percent, although South Korea’s Kospi bucked the downtrend and rose by 0.4 percent.
Meanwhile, the major European markets have turned mixed on the day. While the German DAX Index has fallen by 0.4 percent, the U.K.’s FTSE 100 Index is up by 0.2 percent and the French CAC 40 Index is up by 0.5 percent.
In the bond market, treasuries are seeing further upside after ending the previous session notably higher. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1 basis point at 1.164 percent.
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