Stocks tumble Tuesday: ‘canary in the cold mine’ as expense boost bubbles higher
Andrea Riquier
U.S. stocks slumped Tuesday as signs of a powerful economy sent debt safety yields higher and investors began to question lofty distribute prices.
The broad S&P 500 index slid 1.1% to close at 5,909, while the tech-heavy Nasdaq Composite Index gave up 1.9%, or 375 points, to complete at about 19,490. The Dow Jones Industrial Average slipped 0.4% to close at 42,528.
A update on economic activity in the services sector showed growth was increasing, and one assess of prices was at its highest in nearly two years. Separately, the Job Openings and Labor Turnover update from the Labor Department showed 8.1 million jobs in November, much stronger than analysts had approximate.
The 10-year U.S. Treasury note jumped 7 basis points to 4.68 in midday market activity. debt safety yields rise when prices fall, which is more ordinary in periods of rising expense boost.
Entering the week, technological innovation seemed to buoy investor sentiment. Jensen Huang, CEO of chipmaker Nvidia, spoke Monday night at the annual customer Electronics display in Las Vegas. Shares of the chipmaker gained 3.5% Monday, but tumbled 6% on Tuesday.
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Frothy valuations for tech companies may be reaching their limit, said statement Smead, founder and chairman of Smead pool Management, an property adviser with more than $7.5 billion in assets under management.
“It’s not unusual for a narrow throng of stocks to carry the S&P 500 to higher highs, and that’s what we’ve had,” Smead said in an interview. “But notice even the glam guys are starting to get hit.”
Tesla shares have been hammered off and on over the history few weeks, as annual deliveries fell for the first period and competitors saw stronger demand. Shares of the electric carmaker slumped again on Tuesday. And high-flying Nvidia has wobbled repeatedly over the history month, including on Tuesday in spite of a well-received keynote from Huang.
“You’re beginning to view the canaries in the coal mine,” Smead said.
Among the various sectors of the S&P 500, only vigor notched a boost on Tuesday. Areas that do well in slower economies, like utilities and customer staples, were down — but so were those that advantage from better activity, like customer discretionary companies.
U.S. markets will close Thursday as former President Jimmy Carter is laid to rest. And Friday brings the closely watched monthly jobs update from the Labor Department.
This narrative has been updated with additional information
