June 23, 2024

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Equality opinion

Stocks drift lower on Wall Street; yields continue to ease | National News

Stocks closed broadly lower on Wall Street Tuesday, giving back some of their big gains from a day earlier.

The S&P 500 fell 0.8{dcfa4b42334872b3517041d7075c48816e8f617446b245cec30e8949517ffd84} after earlier flipping between small gains and losses. A day before, the benchmark index had leaped 2.4{dcfa4b42334872b3517041d7075c48816e8f617446b245cec30e8949517ffd84} for its best performance since June. Technology and internet stocks accounted for much of the selling, a reversal from a day earlier.

For weeks, investors have been focused on the bond market, where a swift recent rise in interest rates is threatening one of the main reasons for the stock market’s run to records through the pandemic. Bond yields eased across the board Tuesday, but expectations for stronger economic growth in coming months continue to fuel worries that interest rates will head higher.

Higher rates force investors to rethink how much they’re willing to pay for stocks, making each $1 of profit that companies earn a little less valuable. That’s making Wall Street reconsider the value of technology stocks, in large part because their recent dominance left them looking even pricier than the rest of the market.

“Valuations have just become problematic across certain pockets of the U.S. (stock) market and investors are starting to realize that,” said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors.

The S&P 500 fell 31.53 points to 3,870.29. The Dow Jones Industrial Average lost 143.99 points, or 0.5{dcfa4b42334872b3517041d7075c48816e8f617446b245cec30e8949517ffd84}, to 31,391.52. The tech-heavy Nasdaq composite dropped 230.04 points, or 1.7{dcfa4b42334872b3517041d7075c48816e8f617446b245cec30e8949517ffd84}, to 13,358.79.