US stocks flirt with breaking three-day losing streak
New York (Juun 9) U.S. stocks pushed higher on Tuesday, with the main indexes on track to break a three-day losing streak.
Recent weakness in stocks had been triggered by rising interest rates as well as expectations that the Federal Reserve will hike interest rates sooner rather than later in light of upbeat economic data.
U.S. Treasurys sold off, sending the yield on a 10-year note up 4 basis points to 2.43%. European government bonds also saw yields rise.
The S&P 500 SPX, +0.10% was up less 3 points at 2,082. The Dow Jones Industrial Average DJIA, +0.04% was up 24 points, or 0.1%, at 17,791. The Nasdaq Composite COMP, -0.11% was still off by 9 points, or down 0.2%, at 5,012.
Jonathan Krinsky, chief market technician at MKM Parners, noted that the weakness in the stock market has been driven by rising interest rates.
“Treasurys had one of their worst weeks in years last week, with the 10-year yield gaining 28 basis points and closing above 2.4% for the first time since last October. As a result, there was a huge dispersion in equities on the sector level, with interest-rate sensitive shares such as utilities, telecoms and consumer staples underperforming,” Krinsky said.
“More and more stocks are falling below their 200-day moving average. While this is a concern, until price breaks out of its range, it is difficult to act on this. The big levels for us are [S&P 500 at] 2,120 resistance, and 2,040 support,” Krinsky said.
Data: On Tuesday, The NFIB small-business index, which measures optimism among smaller companies, rose to 98.3 in May, the highest level since December, as six of 10 components improved.
Job openings in April rose to 5.38 million compared with March’s 5.11 million.
U.S. wholesale inventories rose 0.4% in April, according to U.S. Commerce Department data released Tuesday. This was above expectations of a 0.2% gain.
“Neither one will rattle your cage, but they will be somewhat newsworthy. Janet Yellen used to watch the JOLTS number for job openings very closely back when she was worried about job creation. She probably still does/is,” said Stephen Guilfoyle, managing director at NYSE Floor Operations, in a note.
Earnings: Burlington Stores Inc. BURL, -8.78% slumped 10% after reporting weaker-than-expected first quarter revenue.
Athletics-wear maker Lululemon Athletica Inc. LULU, +9.17% rose 6.6% after the athletics-wear maker reported first-quarter earnings slightly ahead of forecasts.
Shares of Quiksilver Inc. ZQK, -32.48% plunged 29% after the outdoor-apparel company reported second-quarter results that were worse than expected.
For more on today’s notable movers read Movers & Shaker column.
Other markets: Chinese stocks slipped after data showed inflation eased in the country in May, while factory prices sank under pressure from a slowing economy. The downbeat data spurred speculation that Beijing may move to stimulate the economy again, which sent metals prices higher across the board. Read: Will China’s stock market explode on Wednesday?
Other bourses in Asia also closed lower, as investors there worried about the prospect of higher interest rates in the U.S.
In Europe, the Stoxx Europe 600 SXXP, -0.39% headed for a sixth straight day in red, which would be the longest losing streak since December last year. Germany’s DAX 30 index DAX, -0.58% broke below 11,000, taking the benchmark deeper into correction territory.
Oil prices CLN5, +3.18% climbed, but crude futures stayed below $60 a barrel. Gold prices also inched higher.
Source: MarketyWatch
