On Tuesday, stocks fell significantly in daytime trading on the back of falling stocks in major tech companies such as Apple and Google.
Most sectors in the benchmark S&P 500 fell as investors continue to focus on corporate earnings and gauge the progress of the economic recovery. Profits and most economic indicators signal a sustained recovery, but investors remain concerned about the continued threat of COVID-19, inflation and other factors that could impede progress.
The key challenge was the recovery of the labor market. Investors will receive another update with the vacancy report this week.
“The market as a whole fell, but the technical staff fell even more,” said Ross Mayfield, investment strategist at Baird. “If you look at the big picture, you can see that profit margins are strong and we expect more print volume on Friday.”
The S&P 500 is down 0.9% as of 2:51 pm ET. The high-tech Nasdaq Composite fell 2.2% and the Russell 2000 small stock index fell 1.5%. The Dow Jones Industrial Average showed slightly better, falling 56 points, or 0.2%, to 34,055 points.
Large tech stocks were dragging the entire market down. Apple shares fell 4%, Facebook shares fell 2.4%, parent company Google fell 2.5%, and Amazon shares fell 2.9%. The drop added to the late Monday night plunge in tech stocks that drove the Nasdaq down.
Bond yields fell. The yield on 10-year US Treasuries fell to 1.58% from 1.60% a day earlier.
Saudi Aramco said Tuesday that its profits rose 30% in the first quarter year-over-year, thanks to higher crude oil prices and a rebound in demand as large economies struggle to pull themselves out of recession, easing restrictions amid the coronavirus vaccine. deployment.
Stocks were up until this week amid expectations for a recovery and strong company profits this year as large-scale coronavirus vaccination programs help people get back to work and normal activities after more than a year of restrictions. Massive support from the US government and the Federal Reserve, as well as increasingly positive economic data, also helped investors in a buying mood, keeping stocks near their record highs.
According to FactSet, more than half of the S&P 500 companies have already reported their earnings this season, which shows a 54% rise in earnings.
Federal Reserve Chairman Jerome Powell said Monday that the economic outlook in the United States has “clearly improved,” but the recovery remains far too uneven.
Investors will receive a closely monitored employment report on Friday. Economists expect US employers to hire 975,000 workers last month as the economy accelerated its recovery from the pandemic and vaccines rolled out across the country. The unemployment rate is expected to fall from 6% to 5.8%.