Benchmarks ended in the red for the second-straight day, dragged
down by declines in momentum stocks. Investors also remained
cautious ahead of the start of the second-quarter earnings season.
Shares of Internet and bio-tech stocks fell sharply on Tuesday,
adding to the losses they suffered on Monday.
For a look at the issues currently facing the markets, make sure to
Ahead of Wall Street
The Dow Jones Industrial Average (DJI) declined 0.7% to close
Tuesday's trading session at 16,906.62. The Standard & Poor 500
(S&P 500) too dropped 0.7% to finish at 1,963.71. The
tech-laden Nasdaq Composite Index closed at 4,391.46; declining
almost 1.4%. The fear-gauge CBOE Volatility Index (VIX) surged 5.7%
to settle at 11.98. Total volume on the New York Stock Exchange
(NYSE) was about 3.3 billion. Decliners outpaced advancing stocks
on the NYSE. For 59% stocks that declined, 38% advanced.
Declines in high-growth stocks dragged benchmarks down on Tuesday.
The S&P 500 retreated further from Thursday's record close; the
twenty-fifth one for the year. However, the index recovered from
the day's initial lows and managed to close near its 14-day moving
average of 1,964.61. The Dow dropped below the 17,000 mark after
having closed above the key technical level for the first time on
Thursday. The Nasdaq too posted its biggest drop in two months.
Internet stocks suffered heavy losses yesterday. Shares of Internet
television network provider Netflix, Inc. (NASDAQ:
), online retailer Amazon.com Inc. (NASDAQ:
), online travel company TripAdvisor Inc. (NASDAQ:
) and The Priceline Group Inc. (NASDAQ:
) plunged 3.4%, 7.3%, 2.9%, 5.6% and 2.2%, respectively. The
Consumer Discretionary Select Sector SPDR (XLY) declined almost
1.0%, the highest among the S&P 500 sectors.
Internet stocks from the Technology sector such as Groupon, Inc.
), Yelp, Inc. (NYSE:
), LinkedIn Corporation (NYSE:
), Yahoo! Inc. (NASDAQ:
), FireEye, Inc. (NASDAQ:
), Facebook, Inc. (NASDAQ:
) and Twitter, Inc. (NYSE:
) plummeted 2.6%, 6.7%, 6.3%, 2.8%, 8.6%, 3,9% and 7.0%,
Momentum names such as auto manufacturer Tesla Motors, Inc.
) and Internet radio service provider Pandora Media, Inc. (NYSE:
) also incurred losses on Tuesday. Shares of Tesla Motors and
Pandora Media declined 1.6% and 7.3%, respectively.
Bio-tech stocks also extended their losses on Tuesday. Shares of
bio-tech companies such as Gilead Sciences Inc. (NASDAQ:
), Vertex Pharmaceuticals Incorporated (NASDAQ:
) Amgen Inc. (NASDAQ:
), Biogen Idec Inc. (NASDAQ:
), Celgene Corporation (NASDAQ:
) and Regeneron Pharmaceuticals, Inc. (NASDAQ:
) decreased 0.1%, 1.9%, 0.2%, 2.5%, 3.5% and 0.3%, respectively.
The Health Care Select Sector SPDR (XLV) declined 0.9%, the second
biggest among the S&P 500 sectors. Overall, 9 out of 10 sectors
of the S&P 500 ended in the red.
The Russell 2000 Index of small-cap stocks declined 1.2% on
Tuesday. The index had declined 1.8% on Monday, its biggest drop
since April 25.
Among other major releases, Wells Fargo & Company (NYSE:
) is expected to release earnings numbers on Friday. Next week,
behemoths such as JPMorgan Chase & Co. (NYSE:
), The Goldman Sachs Group, Inc. (NYSE:
), Intel Corporation (NASDAQ:
) and Google Inc. (NASDAQ:
) are expected to post earnings results. According to FactSet
Research Systems Inc. (NYSE:
), earnings for the S&P 500 are expected to rise 4.9% this
quarter, outpacing the 2.1% rise reported in the first quarter of
On the economic front, the Board of Governors of the Federal
Reserve System reported yesterday that consumer credit increased by
$19.6 billion in May, following April's $26.1 billion increase.
This increase in the indicator of the potential future spending
levels was more than the consensus estimate of an increase by $17.5
billion. Consumer credit increased at a seasonally adjusted annual
rate of 7.50%. Non-revolving credit increased at an annual rate of
9.25%. Revolving credit rose at an annual rate of 2.50%.
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
NETFLIX INC (NFLX): Free Stock Analysis Report
AMAZON.COM INC (AMZN): Free Stock Analysis
TRIPADVISOR INC (TRIP): Free Stock Analysis
PRICELINE.COM (PCLN): Free Stock Analysis
GROUPON INC (GRPN): Free Stock Analysis Report
YELP INC (YELP): Free Stock Analysis Report
LINKEDIN CORP-A (LNKD): Free Stock Analysis
YAHOO! INC (YHOO): Free Stock Analysis Report
FIREEYE INC (FEYE): Free Stock Analysis Report
FACEBOOK INC-A (FB): Free Stock Analysis Report
TWITTER INC (TWTR): Free Stock Analysis Report
TESLA MOTORS (TSLA): Free Stock Analysis Report
PANDORA MEDIA (P): Free Stock Analysis Report
GILEAD SCIENCES (GILD): Free Stock Analysis
To read this article on Zacks.com click here.