Dow Gives Up Gains; S&P 500, Nasdaq Follow
All of Wall Street’s major indexes headed for losses in the final hour of trading, mirroring a tepid pre-market for Dow futures. The Dow Jones Industrial Average tumbled 38.13 points, or 0.1%, to 26,797.38.
Dow industrials are up 2.5% over the past five days and have returned 14.8% year-to-date.
Tumbling technology and consumer shares dragged the S&P 500 Index lower. The large-cap index fell 0.4% to 2,965.56.
The Nasdaq Composite Index, which is largely driven by technology, declined 0.6% to 8,043.50.
Underlying volatility rose on Tuesday for a second consecutive day. The CBOE VIX, commonly known as the fear index, rose as much as 8.2% to 16.52.
Sector Rotation Spooks Wall Street
The U.S. stock market is undergoing a major rotation into so-called cyclical industries, a move that will likely invoke plenty of volatility in the very near future.
As analysts have noted, a potential change in leadership from technology and defensive stocks to commodity-sensitive industries may have begun last week. In this environment, investors can expect capital outflows from information technology, utilities and consumer stocks in favor of energy, materials and industrial names.
Such moves are considered healthy for stocks, which have salvaged their bull market despite a brutal correction at the end of 2018. While technology stocks have outperformed the S&P 500 this year, defensive players have the upper hand on a 12-month basis.
That said, information technology is an $8 trillion market, and outflows from this sector likely won’t bode well for the major indexes.
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Last modified (UTC): September 10, 2019 7:51 PM