Wall Street rally halts 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 1.2%, and the group weighed most heavily on the benchmark index among its major sectors, which were almost all in the red.
Only consumer discretionary shares <.SPLRCD> posted gains, a modest 0.16% rise, as shares of Home Depot Inc
Prior to Tuesday's session, U.S. stocks had recovered most of their losses from a steep sell-off on 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 global 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 3.8% shy of its record closing high in July after having fallen as much as 6.2% below that level.
With the major indexes having recovered much of last week's losses, investors said they were now 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.
"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."
"We just got back a loss of 800 points," he said, referring to the Dow Jones Industrial Average's recovery from its decline last Wednesday.
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.
The Dow Jones Industrial Average <.DJI> fell 106.46 points, or 0.41%, to 26,029.33, the S&P 500 <.SPX> lost 18.06 points, or 0.62%, to 2,905.59 and the Nasdaq Composite <.IXIC> dropped 41.59 points, or 0.52%, to 7,961.23.
Shares of Netflix Inc
Declining issues outnumbered advancing ones on the NYSE by a 1.39-to-1 ratio; on Nasdaq, a 1.61-to-1 ratio favoured decliners.
The S&P 500 posted 30 new 52-week highs and five new lows; the Nasdaq Composite recorded 43 new highs and 76 new lows.
(Reporting by April Joyner; Additional reporting by Medha Singh and Amy Caren Daniel in Bengaluru; Editing by Anil D'Silva and Lisa Shumaker)
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