Tesla gains after company found not at fault for 2016 fatal crash
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U.S. stocks on Tuesday were pulling back from record territory, as investors dumped energy shares following a sharp drop in oil prices.
The S&P 500 was off by 9 points, or 0.4%, to 2,443, with 10 of the 11 main sectors trading lower. The energy sector was down 1.7%, leading the losers but the main benchmark was only a few points below its record close set on Monday.
Crude oil sank to a 10-month low (http://www.marketwatch.com/story/oil-hovers-at-seven-month-low-as-investors-weigh-up-supply-issues-2017-06-20), falling more than 3%, weighing on the broader market.
Shares of oil companies were among the worst performers. Transocean Ltd.(RIG) was down 4.3%, Marathon Oil Corp(MRO) was down 2.8% and Hess Corp.(HES) was down 2.9%. A popular gauge of energy sector performance, the Energy Select Sector SPDR ETF(XLE), meanwhile, was on pace for its worst one-day drop since March, according to FactSet data.
The Dow Jones Industrial Average slid 19 points to 21,511.15 after touching an intraday record of 21,535.03. Chevron Corp.(CVX) fell 1.2%, while Verizon Communication Inc.(VZ) was down 1.7%.
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Meanwhile, the Nasdaq Composite Index was down 24 points, or 0.4%, to 6,215. The tech-heavy index has moved sharply lower over the past two weeks on concerns the high-value tech industry is in a bubble.
Wall Street is expecting sideways moves in coming weeks due to lack of fundamental news until the next batch of corporate quarterly results.
"The rotation [out of technology stocks] which in part may have been attributed to last week's options expiration, we think, continues as investors' psychology shifts. We suspect that more winding and grinding ahead of second-quarter earnings season in a few weeks will keep the flame of the positive trend from faltering," wrote Peter Cardillo, chief market economist at First Standard Financial, in a note.
There are also fears that higher Federal Reserve interest rates will trigger a market move into so-called defensive plays. Defensive stocks are shares of companies that manufacture products or provide services viewed as essential regardless of the economic cycle such as consumer staples and utilities.
Read:Tech selloff remains a concern after Fed hike, tepid economic growth (http://www.marketwatch.com/story/tech-selloff-remains-a-concern-after-fed-hike-tepid-economic-growth-2017-06-17)
Fed speakers: In a speech in Amsterdam to a conference co-sponsored by the central banks of Sweden and the Netherlands, Boston Fed President Eric Rosengren (http://www.marketwatch.com/story/feds-rosengren-says-low-interest-rates-do-raise-financial-stability-concerns-2017-06-20) said lower rates may be a more permanent feature on the economic landscape because they reflect broad population trends.
Rosengren's remarks come after the Fed last week raised interest rates by a quarter of a percentage point and outlined a plan for shrinking of its massive balance sheet.
Separately, Chicago Fed President Charles Evans said late Monday the central bank could be done raising rates this year (http://www.marketwatch.com/story/feds-evans-says-possible-there-will-be-no-more-rate-hikes-this-year-2017-06-19). He reiterated those comments during talks on Tuesday on CNBC and with The Wall Street Journal. He said he supports the current policy of "very gradual" interest-rate hikes and a slow reduction of the balance sheet. Earlier on Monday, New York Fed President William Dudley struck a hawkish tone (http://www.marketwatch.com/story/feds-dudley-says-hes-not-paying-attention-to-bond-markets-signals-of-concerns-2017-06-19), arguing against slowing the pace of interest-rate increases.
Dallas Fed President Rob Kaplan will participate in a moderated discussion at the Commonwealth Club of California in San Francisco at 3 p.m. Eastern.
On the economic docket for Tuesday, the current-account deficit for the first quarter rose by 2.5% to $116.8 billion in first quarter. See:MarketWatch's economic calendar (http://www.marketwatch.com/economy-politics/calendars/economic)
(http://www.marketwatch.com/economy-politics/calendars/economic)Politics: In a speech to manufacturers in Washington on Tuesday afternoon, Ryan expressed confidence that the Republican can deliver on promises of a major tax overhaul this year, despite a range of challenges facing his party. He told CNBC during an interview after his speech that completing tax reform was crucial to getting gross domestic product anywhere near a 3% growth rate.
Hopes for a groundbreaking tax shake-up were partly behind the so-called Trump trade that lifted stocks sharply after the election in November. However, after the Republicans struggled with pushing through their health-care reform earlier this year, investors started to scale back expectations of imminent changes.
Stock movers:Tesla Inc.(TSLA) rose 1% after the electric-car maker was found "not guilty" (http://www.marketwatch.com/story/tesla-found-not-guilty-in-fatal-may-2016-crash-says-ntsb-2017-06-20) in a May 2016 fatal crash.
Shares of Lennar Corp.(LEN) climbed 1.6% after the home builder reported fiscal second-quarter results that were well above expectations. Rivals D.R. Horton Inc.(DHI) rose 1% and PulteGroup Inc.(PHM) advanced 1.2%.
Shares of Chipotle Mexican Grill Inc. (CMG) dived 7% after the burrito chain said Monday that it is spending more on marketing as it looks to recover from its E.coli crisis (http://www.marketwatch.com/story/chipotles-stock-tumbles-as-sales-warning-prompts-target-cuts-2017-06-20).
Other markets:Asian stocks closed mixed (http://www.marketwatch.com/story/nikkei-leaps-to-22-month-high-other-asian-markets-quiet-2017-06-19), with Japan's Nikkei 225 index rising for a third straight day and European markets were mostly lower (http://www.marketwatch.com/story/european-stocks-get-a-lift-from-consumer-shares-tech-recovery-2017-06-20).
(http://www.marketwatch.com/story/european-stocks-get-a-lift-from-consumer-shares-tech-recovery-2017-06-20)The ICE Dollar Index rose 0.3% as investors digested the latest Fed news and gold edged down 0.1%.
--Sara Sjolin contributed to this article.
(END) Dow Jones Newswires
June 20, 2017 14:24 ET (18:24 GMT)