MARKET SNAPSHOT: U.S. Stocks Under Pressure As Tech Rebound Fizzles Out
Home builders sell off after poor Toll Brothers earnings
U.S. stock-market indexes came under pressure late in the session Tuesday, driven by losses in utilities, telecoms and industrials sectors.
An earlier rebound in the technology sector fizzled out, sending the Nasdaq Composite into negative territory.
See also: Here's how violent the stock-market rotation out of tech has been (http://www.marketwatch.com/story/heres-how-violent-the-stock-market-rotation-out-of-tech-has-been-2017-12-05)
What are the main benchmarks doing?
The S&P 500 index fell 7 points, or 0.3%, to 2,631, with nearly all main sectors trading lower. The benchmark index was trading above its record close in the morning, thanks to a rebound in large technology shares. Utilities and telecoms were leading the losses, down more than 1%.
The Nasdaq Composite was off by 8 points, or 0.1% to 6,768.
The Dow Jones Industrial Average declined 87 points, or 0.4%, to 24,201, with 22 of its 30 main components trading lower. The Dow has been rallying to fresh records over the past week, thanks in part to progress on a U.S. tax overhaul (http://www.marketwatch.com/story/senate-passes-tax-bill-advancing-top-republican-priority-2017-12-02) in Washington.
And see:Portfolio managers are losing their enthusiasm for highflying tech stocks (http://www.marketwatch.com/story/portfolio-managers-are-losing-their-enthusiasm-for-highflying-tech-stocks-2017-12-01)
What are strategists saying?
"The Nasdaq Composite Index was getting a little frothy, so it's not surprising to see that some details in the proposed tax bill turned out to be a catalyst for a selloff in tech stocks over the past few sessions," Quincy Krosby, chief market strategist, at Prudential Financial.
Krosby noted that weakness toward the afternoon is worrisome.
"Typically, you don't want to see markets sell off toward the end of the session. Though if we were to get a slight pullback, it would be just normal," Krosby said.
Don't miss:If you're panicking over tech stocks and taxes, here's a good reason to stop (http://www.marketwatch.com/story/if-youre-panicking-over-tech-stocks-and-taxes-heres-a-good-reason-to-stop-2017-12-05)
Which stocks look like key movers?
Home builders were among the worst hit stocks after disappointing earnings from Toll Brothers Inc. (TOL), whose shares tumbled 6.3% on Tuesday. PulteGroup Inc.(PHM) was down 2.8%, while and Lennar Corp.(LEN) dropped 1.2%.
Mastercard Inc.'s stock (MA) rose 1.4% after the payments company announced a new $4 billion stock buyback program, along with a dividend hike (http://www.marketwatch.com/story/mastercard-to-buy-back-4-billion-in-stock-hike-dividend-2017-12-05).
Regal Entertainment Group's stock (RGC) jumped 9% after British counterpart Cineworld Group PLC(CINE.LN)agreed to buy it for $3.6 billion (http://www.marketwatch.com/story/cineworld-buying-regal-for-36-billion-to-reach-into-us-movie-theater-market-2017-12-05), creating the world's second largest operator of movie theaters. Regal confirmed last week (http://www.marketwatch.com/story/regal-entertainments-stock-soars-after-confirming-buyout-talks-with-cineworld-2017-11-29) that it was in buyout talks with Cineworld (CINE.LN).
Shares in Amazon.com Inc.(AMZN) rose 0.6% as the e-commerce giant launched its full offering in Australia on Tuesday, but analysts said it was a "patchy" initial effort (http://www.marketwatch.com/story/amazon-finally-launches-in-australia-but-its-a-patchy-start-2017-12-05). The foray has been expected to provide an important new beachhead for the online retailer's global distribution network (https://www.wsj.com/articles/welcome-to-the-jungle-amazons-australian-expedition-to-rattle-retailers-1495013400?mod=mktw).
Shares of car-parts seller (http://www.marketwatch.com/story/autozone-shares-jump-6-premarket-after-better-than-expected-earnings-2017-12-05)AutoZone Inc.(AZO) rose 1.4% and clothing manufacturer (http://www.marketwatch.com/story/g-iii-apparel-shares-surge-6-premarket-after-profit-beat-and-raised-guidance-2017-12-05)G-III Apparel Group Ltd.(GIII) rallied 14% as the companies posted better-than-expected quarterly earnings.
What are other assets doing?
European equities (http://www.marketwatch.com/story/european-stocks-hampered-by-losses-for-tech-shares-2017-12-05) largely closed lower, and Asian markets mostly closed with losses (http://www.marketwatch.com/story/tech-stock-selloff-weighs-on-asian-markets-2017-12-04), as drops for tech stocks weighed on those markets. Oil futures (http://www.marketwatch.com/story/oil-prices-hold-steady-after-soft-start-to-the-week-2017-12-05) were up modestly, while gold futures fell. The ICE U.S. Dollar Index (http://www.marketwatch.com/story/pound-slides-to-6-day-low-as-brexit-talks-hit-deadlock-again-2017-12-05) inched higher to 93.362.
The British pound slumped to an almost one-week low on Tuesday, hurt by concerns over the U.K.'s Brexit talks hitting another wall.
What are the economic data signaling?
The U.S. trade deficit in October jumped (http://www.marketwatch.com/story/us-imports-record-amount-of-goods-from-china-mexico-europe-as-trade-deficit-soars-2017-12-05)8.6% to a ninth-month high of $48.7 billion from $44.9 billion. Economists polled by MarketWatch had forecast a $47.6 billion gap.
The Institute for Supply Management's index of service-oriented companies (http://www.marketwatch.com/story/us-businesses-still-growing-rapidly-even-after-tapping-brakes-in-november-ism-finds-2017-12-05) such as banks and retailers fell to 57.4% in November from a 12-year high of 60.1% in October.
Numbers over 50% are viewed as positive for the economy, however, and anything over 55% is considered exceptional.
(END) Dow Jones Newswires
December 05, 2017 15:20 ET (20:20 GMT)