Stocks have moved sharply lower during trading on Tuesday, adding to the modest losses posted in the previous session. The major averages have all moved to the downside, with the tech-heavy Nasdaq leading the way lower.
Currently, the major averages are just off their lows of the session. The Nasdaq is down 283.29 points or 1.8 percent at 15,924.22, the S&P 500 is down 43.12 points or 0.8 percent at 5,087.83 and the Dow is down 206.14 points or 0.5 percent at 38,783.69.
The extended weakness on Wall Street comes as traders continue to cash in on recent strength in the markets, which lifted the S&P 500 and the Nasdaq to record closing highs last Friday.
Uncertainty about the outlook for interest rates is also weighing on the markets ahead of congressional testimony by Federal Reserve Chair Jerome Powell
Powell is due to testify before the House Financial Services Committee on Wednesday and the Senate Banking Committee on Thursday.
The Fed chief is likely to reiterate recent comments stressing the central bank needs greater confidence inflation is slowing before cutting interest rates.
The next monetary policy meeting is scheduled for March 19-20, with the Fed widely expected to leave interest rates unchanged.
In U.S. economic news, a report released by the Institute for Supply Management showed U.S. service sector growth slowed by slightly more than expected in the month of February.
The ISM said its services PMI fell to 52.6 in February after climbing to 53.4 in January. While a reading above 50 still indicates growth, economists had expected the index to show a more modest decrease to 53.0.
The Commerce Department also released a report showing a steep drop in new orders for U.S. manufactured goods in the month of January.
Sector News
Software stocks have shown a substantial move to the downside on the day, dragging the Dow Jones U.S. Software Index down by 3.2 percent.
Among software stocks, GitLab (GTLB) has plummeted by 17.3 percent after the company reported better than expected fourth quarter results but provided disappointing guidance.
Considerable weakness is also visible among computer hardware stocks, as reflected by the 2.5 percent slump by the NYSE Arca Computer Hardware Index.
Semiconductor, biotechnology and networking stocks are also seeing notable weakness, contributing to the steep drop by the tech-heavy Nasdaq.
On the other hand, banking stocks are seeing significant strength, while utilities and gold stocks have also moved to the upside.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan’s Nikkei 225 Index closed just below the unchanged line, while Hong Kong’s Hang Seng Index plunged by 2.6 percent.
The major European markets have also shown modest moves to the downside on the day. While the French CAC 40 Index has edged down by 0.2 percent, the German DAX Index and the U.K.’s FTSE 100 Index are marginally lower.
In the bond market, treasuries have moved sharply higher following the pullback seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 8.0 basis points at 4.139 percent.
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