Stock End Lower, But Recover From Lows
4:08 pm Tuesday, August 17th, 2021
The US stocks closed off their lows as the market move toward the close. However, it seems certain that there won’t be any new records made today in the major indices. A look at the current levels and comparing to the lows shows:
Investors have arguably been anticipating a down day after the S&P 500 and Dow closed at five straight record highs entering the session. The weak bias started in China after the country’s market regulator issued draft rules that ban unfair Internet competition. China’s Shanghai Composite declined 2.0% on Tuesday.
European markets did okay, but U.S. stocks have been pressured by weakness in Home Depot (HD) following its earnings report, weaker-than-expected retail sales data for July, growth concerns attributed to the Delta variant, and expectations for a pullback.
Home Depot is weighing heavily on the S&P 500 consumer discretionary sector (-3.0%) and the iShares US Home Construction ETF (ITB). The latter has felt additional pressure from the NAHB Housing Market Index for August decreasing five points to 75 (consensus 80).
The information technology (-1.4%), materials (-2.3%), industrials (-2.0%), and financials (-1.6%) sectors also underperform with losses over 1.5%. Conversely, the health care sector (+0.4%) is a bright spot in a sea of red.
Walmart (WMT), too, was bucking the negative trend after reporting positive earnings results and issuing upbeat FY22 EPS guidance. Most retail stocks were following HD lower, though.
Elsewhere, the 10-yr yield is down just one basis point to 1.25%. That’s not bad considering the weak disposition in stocks and the relatively disappointing retail sales report, which actually helped the benchmark yield bounce off session lows (1.22%).
