Stocks fell sharply Tuesday with shares of tech giants remaining under pressure as investors rotated into higher-yielding value stocks and sectors poised to benefit from the economy’s recovery.
There also were reports of military tensions between China and Taiwan that dented optimism on Wall Street.
The Dow Jones Industrial Average dropped 269 points, or 0.79%, to 33,843, the S&P 500 declined 1.19% and the tech-heavy Nasdaq tumbled 2.25%, led lower by Apple (AAPL) – Get Report, Tesla (TSLA) – Get Report and Amazon.com (AMZN) – Get Report.
Stocks finished mixed Monday as Wall Street kicked off the first trading day of May with investors betting on a strong U.S. recovery. The Nasdaq, however, ended down 0.48%, led by declines in tech giants.
Stocks have been rising as a recovery gathers pace in the U.S. and abroad thanks to vaccination programs that have helped people get back to work and allowed for restrictions to be lifted.
A bevy of solid earnings reports also has given stocks a boost.
According to FactSet, more than 60% of the companies in the S&P 500 have posted results, with the blended S&P 500 earnings growth rate in the first quarter at 45.8%, up from 24.5% at the start of earnings season and the 15.8% expected at the start of the quarter. About 86% of companies have surpassed analysts’ expectations, a record high.
Federal Reserve Chairman Jerome Powell said Monday the economic outlook in the U.S. has “clearly brightened” but the recovery has been uneven. The Fed chief said the “economic downturn has not fallen evenly on all Americans and those least able to bear the burden have been the hardest hit.”
Pfizer (PFE) – Get Report posted stronger-than-expected first-quarter earnings and lifted its full-year profit guidance as it expects to generate around $26 billion in worldwide sales for its BNT162b2 coronavirus vaccine.
Meanwhile, the Food and Drug Administration likely will authorize use of the Pfizer and BioNTech (BNTX) – Get Report coronavirus vaccine in adolescents 12 to 15 years old by early next week, The New York Times reported, citing federal officials familiar with the agency’s plans.
Oil prices were rising with news of state reopenings in New York, New Jersey and Connecticut taken as a signal for higher fuel demand in the coming months.
Ethereum, the second-largest cryptocurrency, set another record high Tuesday, eating further into bitcoin’s dominance of the total cryptocurrency market.