NEW YORK: Wall Street stocks retreated on Tuesday (June 20), giving back a fraction of the gains from recent weeks amid talk that markets are overbought.
Major indices spent most of the day in the red, finishing off session lows, with oil super-majors Exxon Mobil Corp and Chevron Corp weighing on the S&P 500 and the Dow.
The Dow Jones Industrial Average fell 245.25 points, or 0.72%, to 34,053.87, the S&P 500 lost 20.88 points, or 0.47%, to 4,388.71 and the Nasdaq Composite dropped 22.28 points, or 0.16%, to 13,667.29.
Of the 11 major sectors of the S&P 500 all but consumer discretionary stocks ended in negative territory.
“Markets don’t go up every day and every week,” said Steve Sosnick of Interactive Brokers.
“It’s reasonable to expect them to see a little profit taking every now and again. I think so far, that’s what we’ve seen,” he added, referring to the process of selling shares when the asset has grown in price.
After a difficult 2022, US stocks have been enjoying a solid 2023, particularly over the last two months on bullish sentiment over artificial intelligence advances and anticipation of an imminent shift in Federal Reserve (Fed) policy.
Investors are also more hopeful the US can avert a recession, with the Fed’s interest rate hikes seen slowing growth but not resulting in a “hard landing” for the economy.
Government data released on Tuesday showed new home construction reached in May its highest level in more than a year.
“The market is trying to test whether these recent gains are going to stick,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. “The market runs in cycles and the most recent rally has surprised a lot of people.”
Among individual companies, shares of Warner Bros Discovery dropped 4.8% following a disappointing first weekend of The Flash, a new live-action superhero movie.
Eli Lilly won 1% after announcing it will acquire Dice Therapeutics, which develops oral therapeutics. Dice jumped 37.2%.
Chinese e-commerce giant Alibaba tumbled 4.5% after announcing new executive leadership as it looks to recover from years of slow growth caused by weak consumer spending and a regulatory crackdown. – AFP, Reuters
