Day Traders Diary
The major averages closed mixed as the S&P 500 snapped a two-day winning streak and the Nasdaq Composite fell over 2% as fears from Snap's bleak warning spread to other tech names. The tech-heavy Nasdaq dropped about 2.34% to 11,264. The S&P 500 moved 0.8% lower to 3,941. Meanwhile, the Dow added 48 to 31,928. It fell as much as 1.6% earlier in the session.
chip stock index got a boost from UnitedHealth Group, which jumped 1.1% ahead of the close. Dow components McDonald's, Verizon and IBM all added more than 2%.
The 10-year Treasury yield made a sudden move lower as investors fearing a recession crowded into bonds sending their prices higher. The 10-year Treasury yield slipped as low as about 2.73% on Tuesday after topping 3% earlier this year.
Shares of tech companies led the day's losses as investors feared a slowdown in digital advertising following a warning from social media company Snap. Its shares plummeted 43% after the company said it's bracing to miss earnings and revenue targets in the current quarter and warned of a downturn in hiring. Meta Platforms followed Snap lower, falling 7.6%. Google-parent Alphabet dropped nearly 5% and hit a new 52-week low.
Amazon also fell to a new 52-week low, and shares ended the day down 3.2%. Apple shed 1.9%.
The negative reversal Tuesday came after stocks rallied Monday as the Dow jumped 618 points, or nearly 2%. The S&P 500 rose 1.9%, and the Nasdaq Composite gained 1.6%. The brief bounce came as the market is mired in a relentless sell-off with the Dow down for 8 straight weeks and the S&P 500 briefly hitting bear market territory on Friday.
Billionaire hedge fund manager Bill Ackman said in a slew of tweets Tuesday that with inflation spiraling out of control, aggressive rate hikes by the Federal Reserve are the only way to tame it and that investors will ultimately favor those measures to avoid "economic collapse and demand destruction."
The S&P 500 sits 18.2% from its record after falling more than 20% from its high at one point on Friday. The Dow's losing streak is its longest since 1923.
Along with tech stocks, the sell-off has been driven by losses in the retail sector following weak earnings and outlooks from Target and Walmart last week. Investors got more poor news from that industry Tuesday with Abercrombie & Fitch dropping 28.6% after reporting that freight and product costs weighed on sales for the fiscal first quarter.
Best Buy shares ended the day up 1.2% after the company reported a mixed quarter.
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