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Market Snapshot: Dow rises, but Nasdaq Composite falls as tech sector sees renewed pressure

U.S. technology stocks were under pressure Tuesday afternoon as Treasury yields extended a rise, dragging down major stock indexes.

Energy shares were rallying, however, as oil prices bounced despite the White House announcing the U.S. would release crude from its Strategic Petroleum Reserve in a coordinated move with other countries to try to lower the cost of gasoline.

How are stocks trading?

The Dow Jones Industrial Average DJIA rose almost 163 points, or 0.5%, to about 35,782.

The S&P 500

was little changed at around 4,683.

The Nasdaq Composite

was down 126 points, or 0.8%, at about 15,729.

On Monday, the Dow Jones Industrial Average 

rose less than 0.1% to end at 35,619.25. The S&P 500

fell 0.3% after hitting an intraday all-time high at 4,743.83 earlier in the session. The Nasdaq Composite Index 

fell 1.3% to 15,854.76 for its biggest decline since Nov. 10.

What’s driving the market?

Technology stocks attempted an early rebound, but were unable to maintain upside momentum, after a slide in the previous session.

The market may be pricing in a rise in interest rates beginning in the middle of next year, which is “not positive for long-duration assets like technology” stocks, said Wayne Wicker, chief investment officer at MissionSquare Retirement, in a phone interview Tuesday.

Monday’s late-day weakness in the stock market was tied by some analysts to expectations that Federal Reserve Chairman Jerome Powell — nominated to a second term by President Joe Biden earlier the same day — could tighten monetary policy faster than Lael Brainard, who was appointed Vice Chair but had also been in the running for the top job.

Read: What a Fed led by Powell and Brainard means for Americans’ bank accounts

“Ultimately I don’t see how the Powell-led Fed is more hawkish today than it was last week, but we should always beware linear thinking: even the Fed can adapt and learn from the persistently high inflation,” said Neil Wilson, chief market analyst for, in a note to clients.

“You never know, perhaps the Fed — and the White House — are starting to heed some warnings about what untethered inflation can do. In summary, you could say there has been a whiff of a hawkish tilt at the Fed in recent weeks and the administration is OK with that,” said Wilson.

The yield on the 10-year Treasury note

was up about 4 basis points on Tuesday afternoon at around 1.67%, after on Monday seeing its largest daily gain since November 10, according to Dow Jones Market Data.

Investors also are watching yet another resurgence of new coronavirus cases in Europe and Asia in particular, which have prompted another round of restrictions on businesses and consumers to try to limit infections.

Lockdowns can be “detrimental” to economic growth, said Wicker. “I can’t imagine that we’ll revert to that,” in the U.S., he said, “especially with booster shots coming into play.”

Read: Don’t expect U.S. to follow Europe with new COVID lockdowns

In economic data, a pair of surveys by IHS Markit showed U.S. businesses grew rapidly in November, even as they’re still being hampered by labor and supply shortages that are feeding the biggest burst of inflation in 31 years.

The so-called flash survey of U.S. manufacturers rose to a two-month high of 59.1 in November from 58.4 in the prior month, while a similar survey of service-oriented companies fell to a two-month low of 57 from 58.7.

“They’re both still pretty strong, even though the numbers are a little bit weaker on the services side,” said Dave Grecsek, managing director in investment strategy and research at wealth management firm Aspiriant, in a phone interview Tuesday. Any number above 50 signals expansion and figures above 55 are seen as exceptional.

Across other markets, oil futures erased losses to turn higher after the White House announced a plan to release 50 million barrels of oil from the U.S. Strategic Petroleum Reserve, or SPR, in coordination with other countries. West Texas Intermediate crude

the U.S. benchmark, rose 2.3% Tuesday to settle at $78.50 a barrel.

“It’s a big pawn game,” Wicker said of the U.S. effort to lower energy prices. Wicker said that he anticipates the move won’t have any long-term effect on the price of oil and that he continues to like energy stocks.


was the S&P 500’s best-performing sector Tuesday afternoon, up 2.7%, according to FactSet data, at last check. The financials sector

showed the next biggest gain at 1.3% in Tuesday afternoon trading.

Grecsek said that he likes cyclical, “value-oriented” areas of the stock market, including sectors such as financials and industrials, as they should do well under the “reflation theme.” He also expressed concern over the valuations of growth stocks.

“We’ve been saying for a while that a lot of the growth-styled equities are overvalued,” Grecsek said. The Russell 1000 Growth index

was down 0.6% Tuesday afternoon, compared to a gain of about 0.6% for the Russell 1000 Value index
according to FactSet data, at last check.

Trading is expected to thin out as the U.S. Thanksgiving Day holiday nears. U.S. markets will close Thursday for the holiday and open for a half-day on Friday.

What companies are in focus?

Shares of Zoom Video Communications

fell more than 14% after company executives detailed falling revenue on a conference call late Monday. That was after the company posted a forecast beating outlook, revenue and earnings.

Best Buy

shares tumbled more than13% after the electronics retailer forecast holiday season comparable sales below expectations, though it reported a quarterly beat on the top and bottom lines, with a profit of $2.08 per share coming in 17 cents a share above estimates.

Abercrombie & Fitch

shares dropped about 12%. The retailer’s results beat forecasts as Chief Executive Fran Horowitz spoke of “ongoing supply chain constraints,” delivery delays and higher costs.

Shares of XPeng Inc.

rallied more than 5% after the China-based electric vehicle maker reported a wider-than-expected third-quarter loss, but revenue above forecasts and delivered an upbeat fourth-quarter outlook

Dollar Tree

shares rose more than 9% after the retailer matched profit forecasts and topped expectations for sales, but saw falling gross margin and said it was moving to a $1.25 price point for all its stores.

How are other assets trading?

The ICE U.S. Dollar Index
 a measure of the currency against a basket of six major rivals, was down less than 0.1%.

Gold futures

fell 1.2% to settle at $1,783.80 an ounce.

The Stoxx Europe 600 

closed 1.3% lower, while London’s FTSE 100 index

rose 0.2%.

In Asia, the Shanghai Composite 

 finished up 0.2%, while the Hang Seng Index 

 fell 1.2% in Hong Kong. China’s CSI 300

was little changed and Japan’s Nikkei 225 

was closed for a holiday.

—Barbara Kollmeyer contributed to this report.

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