Wall Street rally ends as financial shares slide
By April Joyner NEW YORK (Reuters) - Financial shares led U.S. stocks lower on Tuesday to end a three-day rally as investors awaited comments from Federal Reserve Chair Jerome Powell at the end of the week
By April Joyner
NEW YORK (Reuters) - Financial shares led U.S. stocks lower on Tuesday to end a three-day rally as investors awaited comments from Federal Reserve Chair Jerome Powell at the end of the week.
The S&P 500 financial index <.SPSY> dropped 1.4% and the group weighed most heavily on the benchmark index among its major sectors, which all registered losses.
Prior to Tuesday's session, U.S. stocks had recovered most of their losses from a steep sell-off last Wednesday, which was triggered by a brief inversion of the yield curve between 2-year and 10-year Treasuries, widely considered a harbinger of a recession. Reports of stimulus efforts in China and Germany, along with the subsequent steepening of the yield curve, helped assuage recession fears.
The S&P 500 is now 4.1% shy of its record closing high in July after having fallen as much as 6.2% below that level.
Investors said they were looking forward to Friday's speech from the Fed's Powell at the Jackson Hole central bankers' conference for more clues on the course of monetary policy and interest rates. Hints on the U.S. central bank's plans may also be found in minutes from the Fed's July policy meeting, which will be released on Wednesday.
"Everyone is waiting for Jackson Hole," said Jim Awad, senior managing director at Clearstead Advisors in New York. "It's a wait-and-see attitude until Friday."
The Fed's moves have drawn close attention as U.S. economic growth has moderated and the U.S.-China trade dispute has weighed on business confidence. On Tuesday, President Donald Trump said his administration was looking at cuts to payroll and capital gains taxes.
Some investors said that such efforts, along with Trump's calls for the Fed to lower rates, could signal wavering confidence in the U.S. economy.
"It adds to the perception that there is concern," said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey.
The Dow Jones Industrial Average <.DJI> fell 173.35 points, or 0.66%, to 25,962.44, the S&P 500 <.SPX> lost 23.14 points, or 0.79%, to 2,900.51 and the Nasdaq Composite <.IXIC> dropped 54.25 points, or 0.68%, to 7,948.56.
Shares of Netflix Inc
Home Depot Inc
Declining issues outnumbered advancing ones on the NYSE by a 1.49-to-1 ratio; on Nasdaq, a 1.71-to-1 ratio favoured decliners.
The S&P 500 posted 30 new 52-week highs and five new lows; the Nasdaq Composite recorded 45 new highs and 80 new lows.
Volume on U.S. exchanges was 5.75 billion shares, compared with the 7.56 billion average for the full session over the last 20 trading days.
(Reporting by April Joyner; Additional reporting by Medha Singh and Amy Caren Daniel in Bengaluru; Editing by Anil D'Silva, Lisa Shumaker and Dan Grebler)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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