U.S. Stocks Seeing Modest Weakness Following Two-Day Rally
Stocks are seeing modest weakness in morning trading on Tuesday, giving back ground after moving sharply higher over the two previous sessions. Selling pressure has remained somewhat subdued, however, limiting the downside for the major averages.
Currently, the major averages are off their lows of the session but still in negative territory. The Dow is down 82.07 points or 0.2 percent at 33,547.49, the Nasdaq is down 36.70 points or 0.3 percent at 11,327.71 and the S&P 500 is down 16.09 points or 0.4 percent at 4,003.72.
The modest weakness on Wall Street comes as some traders look to cash in on the recent strength in the markets amid lingering concerns about the outlook for interest rates and the economy.
The notable two-day rally seen last Friday and Monday lifted the Nasdaq and the S&P 500 to their best closing levels in over a month.
A steep drop by shares of 3M (MMM) is weighing on the Dow, with the diversified manufacturer plunging by 6.5 percent.
3M is under pressure after reporting weaker than expected fourth quarter earnings and providing disappointing guidance. The company also announced plans to cut 2,500 jobs.
Fellow Dow component Johnson & Johnson (JNJ) has also moved to the downside despite reporting better than expected fourth quarter earnings and providing upbeat guidance.
On the other hand, shares of Verizon (VZ) are seeing some strength even though the telecom giant forecast 2023 earnings below analyst estimates.
Overall trading activity remains somewhat subdued, however, with a lack of major U.S. economic data likely keeping some traders on the sidelines.
Reports on durable goods orders, fourth quarter GDP, new home sales and personal income and spending are likely to attract attention in the coming days.
Natural gas stocks have shown a notable move to the downside on the day, dragging the NYSE Arca Natural Gas Index down by 1.8 percent.
The weakness in the sector comes amid a decrease by the price of natural gas, with natural gas for March delivery falling $0.046 or 1.4 percent to $3.176 per million BTUs.
A decrease by the price of crude oil is also weighing on oil service stocks, resulting in a 1.4 percent drop by the Philadelphia Oil Service Index.
Networking, healthcare and pharmaceutical stocks are also seeing notable weakness, while most of the other major sectors are showing more modest moves.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Tuesday, although most markets remained closed for the Lunar New Year. Japan’s Nikkei 225 Index shot up by 1.5 percent, while Australia’s S&P/ASX 200 Index rose by 0.4 percent.
Meanwhile, the major European markets have moved to the downside on the day. While the French CAC 40 Index has dipped by 0.3 percent, the German DAX Index and the U.K.’s FTSE 100 Index are both down by 0.5 percent.
In the bond market, treasuries have shown a lack of direction after trending lower over the past few sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 3.523 percent.
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