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S&P 500, Dow decline after recent advances, Nasdaq hits 10,000

by Jonathan Adams

The benchmark S&P 500, which erased its losses for the year, is about 5% below its all-time high

The S&P 500 and Dow fell on Tuesday after recent strong gains, while the Nasdaq extended its record run and briefly rose above the 10,000 mark for the first time.

Investors eyed this week’s Federal Reserve meeting. While no major policy announcements are expected when the U.S. central bank wraps up its two-day meeting on Wednesday, investors will scrutinize its remarks on the health of the economy, which has been reopening after coronavirus-related closures.

The benchmark S&P 500, which erased its losses for the year on Monday, is about 5% below its own all-time high.

The Nasdaq hit a record intraday high for the third straight session. On Monday, it set a closing high and became the first of Wall Street’s main indexes to confirm a new bull market after hitting a low on March 23.

It strikes me as maybe a reflexive selloff as a result of a tremendous rally over the past week. There’s no news headline that screams bearish catalyst to me. But conversely, other than the nonfarm payrolls data, the past two weeks haven’t had super bullish catalysts either, said Mike Zigmont, head of trading at Harvest Volatility Management in New York.

In the grand scheme of things, it seems like the market has caught a bullish fever, and it’s feeding on itself, he said.

The rally in U.S. stocks accelerated last week after strikingly upbeat May jobs data strengthened views that the worst of the economic fallout from the pandemic was over.

Financial, industrial and energy stocks, which have surged in recent weeks on hopes of an improved economic outlook, were the biggest drags on the benchmark S&P 500.

The Dow Jones Industrial Average fell 241.63 points, or 0.88%, to 27,330.81, the S&P 500 lost 20.34 points, or 0.63%, to 3,212.05 and the Nasdaq Composite added 46.28 points, or 0.47%, to 9,971.02.

U.S. financial market operators, including the New York Stock Exchange, held a moment of silence in honour of George Floyd.

The S&P 1500 airlines index tumbled, while cruise operators Carnival Corp and Norwegian Cruise Line Holdings Ltd fell following their recent sharp recovery amid recent signs of a pickup in global travel.

The closely watched U.S. yield curve steepened the most since March as U.S. data improved.

Declining issues outnumbered advancing ones on the NYSE by a 3.15-to-1 ratio; on Nasdaq, a 1.76-to-1 ratio favoured decliners.

The S&P 500 posted 9 new 52-week highs and no new lows; the Nasdaq Composite recorded 45 new highs and one new lows.

This article is for information purposes only.
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