Stock Market News for Mar 29, 2023

·3-min read

U.S. stocks ended marginally lower on Tuesday, led by a selloff in tech stocks after a solid run in recent times as investors assessed the state of the nation’s banking sector and economy’s health. All three major indexes ended in negative territory.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) fell 0.1% or 37.83 points to end at 32,394.25 points.

The S&P 500 shed 0.2% or 6.26 points to finish at 3,971.27 points. Tech and communication stocks were the biggest losers on the index. However, energy stocks gained.

The Technology Select Sector SPDR (XLK) lost 0.5%, while the Communication Services Select Sector SPDR (XLC) declined 0.8%. The Energy Select Sector SPDR (XLE) gained 1.6%. Six of the 11 sectors of the benchmark index ended in negative territory.

The tech-heavy Nasdaq dropped 0.5% or 52.76 points to close at 11,716.08 points.

The fear-gauge CBOE Volatility Index (VIX) was down 3.06% to 19.97. Advancers outnumbered decliners on the NYSE by a 1.43-to-1 ratio. On Nasdaq, a 1.28-to-1 ratio favored declining issues. A total of 9.66 billion shares were traded on Tuesday, lower than the last 20-session average of 12.75 billion.

Markets Stabilizing but Worries Continue

Wall Street ended mostly higher on Monday and investors appeared to get back the lost confidence on Tuesday with no major negative news from the banking sector. The Dow started the session in the green but gave up all its gains in afternoon trading.

Fed officials including Treasury Secretary Janet Yellen last week assured investors that the U.S. banking sector wasn’t facing any liquidity crisis. This saw markets end in the green last week amid volatility.

However, fears haven’t completely waned and investors were expecting to get a clearer picture of the state of the banking sector from top regulators as they began their two-day Congressional testimony on the supervision of Signature Bank and Silicon Valley Bank, which collapsed earlier this month.

The existing fears weighed on stocks on Tuesday dragging down the indexes.

Bond Yields Rise

With fears of a credit bottleneck that could hinder economic growth slowly waning, government bond yields have once again been climbing. The 2-year Treasury yield, which is sensitive to monetary policy, surpassed 4% on Tuesday after falling below 3.6% last week. As rates rise, future profits, like those promised by growth stocks, become less alluring.

The rise in bond yields put tech stocks under pressure on Tuesday. Shares of Apple Inc. (AAPL) and Microsoft Corporation (MSFT) each declined 0.4%. Apple has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

The rise in bond yields also weighed on communication stocks. Shares of Verizon Communications Inc. (VZ) declined 0.1%, while AT&T Inc. (T) lost 0.8%.

Economic Data

Advance Trade in Goods showed a deficit of -$91.6 billion, deeper than the upwardly revised -$91.1 billion but better than the originally reported -$91.9 billion for January.

Advance Retail Inventory for February climbed to +0.8% from the previous month's downwardly revised +0.1%. Advance Wholesale Inventories changed direction from January's downwardly revised -0.5% to a positive +0.2% in February.

The S&P Case-Shiller home price index on Tuesday reflected a 0.4% decline in prices in January from the prior month. However, prices are still up 2.5% year over year. According to separate data from the Federal Housing Finance Agency, home prices rose 0.2% in January on a month-over-month basis.

The Conference Board said that U.S. Consumer Confidence index unexpectedly rose to 104.2 in March from a revised 103.2 in February, which was also above the consensus estimate of 101.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

AT&T Inc. (T) : Free Stock Analysis Report

Apple Inc. (AAPL) : Free Stock Analysis Report

Microsoft Corporation (MSFT) : Free Stock Analysis Report

Verizon Communications Inc. (VZ) : Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research