By Joseph Adinolfi and William Watts
The S&P 500 index closed at its lowest level in nearly two years Tuesday while cementing its longest losing streak since February 2020 as markets remained volatile, with only the Nasdaq Composite escaping a daily loss.
How stocks traded
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.56% closed 125.82 points, or 0.4%, lower at 29,134.99.
The S&P 500 /zigman2/quotes/210599714/realtime SPX -0.09% finished down 7.75 points, or 0.2%, at 3,647.29.
The Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.13% closed 26.58 points, or 0.3%, higher at 10,829.50.
The Dow entered a bear market on Monday, having fallen 20.5% from its record close on Jan. 4, while the S&P 500 took out its 2022 low from June 16 to end at its lowest since Dec.14, 2020. The Nasdaq Composite fell 0.6%, and remains the only one of the three main indexes that hasn’t fallen below its lowest levels from June.
What drove markets
Stocks fluctuated between gains and losses on Tuesday, but the S&P 500 ultimately closed at its lowest level since Nov. 30, 2020 while the Dow recorded its lowest close since Nov. 12 of that same year.
The blue-chip gauge briefly broke below 29,000 Tuesday afternoon, marking the first time it has dropped below that level on an intraday basis since Nov. 12, 2020.
Market analysts attributed stocks’ woes to higher Treasury yields and the stronger dollar and which have become major bugbears for the market. They also blamed a batch of unexpectedly strong economic data, which helped reinforce the notion that “good news” for the U.S. economy is once again “bad news” for the market.
“What you saw today was ‘good news is bad news’ — we’re back to that again,” said Joe Saluzzi, co-head of equity trading at Themis Trading. “That gives the Fed more cover in case people start to complain about what the Fed is doing.”
He also said he expects stocks to remain under pressure for some time.
“There’s just no conviction in this market,” Saluzzi said.
The yield on the 10-year Treasury /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y -4.39% rose 8.5 basis points to 3.963%, while the 2-year yield /zigman2/quotes/211347045/realtime BX:TMUBMUSD02Y -2.75% rose less than 1 basis point to 4.308%. The dollar remained modestly higher, with the ICE U.S. Dollar Index DXY up 0.1% at 114.26.
Investors digested a spate of U.S. economic data on Tuesday, but Saluzzi said the focus was on new home sales data for August, as well as a report on consumer confidence.