Nasdaq Recovers From Initial Drop But Dow Closes Modestly Lower
After coming under pressure early in the session, stocks turned mixed over the course of the trading session on Tuesday. Traders largely seemed reluctant to make significant moves ahead of Congressional testimony by Federal Reserve Chairman Jerome Powell.
The major averages showed significant moves to the upside going into the close, with the S&P 500 joining the tech-heavy Nasdaq in positive territory.
Partly offsetting the losses posted in the two previous sessions, the Nasdaq climbed 43.35 points or 0.5 percent to 8,141.73 and the S&P 500 inched up 3.68 points or 0.1 percent to 2,979.63.
Meanwhile, the Dow briefly peeked above the unchanged line but ended the session down 22.65 points or 0.1 percent at 26,783.49.
A notable drop by 3M (MMM) weighed on the Dow, with the diversified manufacturer sliding by 2.1 percent after RBC Capital Markets downgraded its rating on the company’s stock to Sector Perform from Outperform.
Overall trading activity was subdued, as traders looked ahead to Powell’s testimony, hoping for signs of a near-term interest rate cut.
Powell is due to testify before the House Financial Services Committee on Wednesday and before the Senate Banking Committee on Thursday.
The Fed chief is not likely to specifically lay out the central bank’s plans to lawmakers, but traders are likely to closely analyze his comments for clues about the outlook for rates.
Wednesday will also see the release of the minutes of the Fed’s last monetary policy meeting, which may shed additional light on the central bank’s decision to make notable changes to its accompanying statement.
Biotechnology stocks showed a significant move back the upside following the sharp drop seen over the course of the previous session.
Reflecting the rebound by the biotech sector, the NYSE Arca Biotechnology Index surged up by 1.6 percent following the 1.8 percent sump on Monday.
Considerable strength was also visible among networking stocks, as reflected by the 1.3 percent gain posted by the NYSE Arca Networking Index.
Acacia Communications (ACIA) led the sector higher after the networking company agreed to be acquired by Cisco Systems (CSCO) for $70 per share in cash.
Gold stocks also moved notably higher amid an uptick by the price of the precious metal, while chemical and tobacco stocks moved to the downside.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Tuesday, although Japan’s Nikkei 225 Index bucked the downtrend and inched up by 0.1 percent. China’s Shanghai Composite Index dipped by 0.2 percent, while Hong Kong’s Hang Seng Index slid by 0.8 percent.
The major European markets also moved to the downside on the day. While the German DAX Index fell by 0.9 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index slipped by 0.3 percent and 0.2 percent, respectively.
In the bond market, treasuries pulled back once again following the modest rebound seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2 basis points at 2.054 percent.
Powell’s testimony and the minutes of the Fed’s June meeting are likely to be in focus on Wednesday, as traders attempt to gauge the likelihood of an interest rate cut at the next central bank meeting later this month.
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