U.S. Stocks Recover From Early Weakness, Nasdaq Hits Record High
After moving moderately lower early in the session, stocks have regained some ground over the course of the trading day on Tuesday. The major averages have climbed off their lows of the session, with the Nasdaq peeking above the unchanged line to reach a new record intraday high.
Currently, the Nasdaq is clinging to a modest gain, up 1.08 points or less than a tenth of a percent at 9,390.02. Meanwhile, the Dow is down 39.01 points or 0.1 percent at 29,309.09 and the S&P 500 is down 2.07 points or 0.1 percent at 3,327.55.
The early weakness on Wall Street came amid concerns about the economic impact of a deadly coronavirus outbreak in China.
Chinese officials revealed the coronavirus outbreak has resulted in six deaths among nearly 300 confirmed cases, with the virus confirmed to be transmissible among humans.
Adding to the negative sentiment, the International Monetary Fund downwardly revised its forecast for global economic outlook due to bigger than expected slowdowns in emerging markets like India.
The IMF said it now expects 3.3 percent global growth in 2020 compared to its previous estimate for 3.4 percent growth. The organization also lowered its 2021 growth forecast to 3.4 percent from 3.6 percent.
Selling pressure remained relatively subdued, however, with traders seemingly reluctant to miss out on any further upside.
A lack of major U.S. economic data may also be keeping some traders on the sidelines following the long, holiday weekend.
The economic calendar remains relatively quiet throughout the week, which may lead to increased attention on the latest earnings news.
A number of big-name companies are due to report their quarterly results this week, including IBM Corp. (IBM), Netflix (NFLX), Johnson & Johnson (JNJ), Procter & Gamble (PG), Intel (INTC), and American Express (AXP).
Despite the recovery attempt by the broader markets, natural gas stocks continue to see substantial weakness in mid-day trading. The NYSE Arca Natural Gas Index has tumbled by 2.5 percent to its lowest intraday level in a month.
The continued weakness among natural gas stocks comes amid a steep drop by the price of the commodity, with natural gas for February delivery plunging $0.089 or 4.4 percent to $1.914 per million BTUs.
Significant weakness also remains visible among steel stocks, as reflected by the 2.2 percent slump by the NYSE Arca Steel Index. The index has also fallen to a one-month intraday low.
Tobacco, oil service and transportation stocks are also seeing notable weakness on the day, while gold stocks have moved higher despite a decrease by the price of the precious metal.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan’s Nikkei 225 Index slumped by 0.9 percent, while Hong Kong’s Hang Seng plummeted by 2.8 percent.
European stocks also ended the day mostly lower, although the German DAX Index bucked the downtrend and inched up by 0.1 percent. The U.K.’s FTSE 100 Index and the French CAC 40 Index both fell by 0.5 percent.
In the bond market, treasuries have moved notably higher amid their appeal as a safe haven. As a result, the yield on the benchmark ten-year, which moves opposite of its price, is down by 5.6 basis points at 1.780 percent.
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