U.S. stock benchmarks ended slightly lower Tuesday, as concerns about the possibility of war in the Middle East overshadowed favorable U.S. economic data.
How did benchmarks perform?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -4.44% shed 119.70 points, or 0.4%, at 28,583.6, while the S&P 500 /zigman2/quotes/210599714/realtime SPX -4.41% lost 9.10 points, 0.3%, at 3,237.18. The Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP -4.41% gave up 2.88 points, or less than 0.1%, at 9,068.58.
On Monday, the Dow advanced 68.50 points, or 0.2%, to close at 28,703.38, while the S&P 500 rose 11.43 points, or 0.4%, to end at 3,246.28. The Nasdaq Composite Index gained 50.70 points, or 0.6%, finishing at 9,071.46.
All three benchmarks finished two of the past three trading days lower, but still closed Tuesday 1% or less from all-time record closes, according Dow Jones Market Data.
What drove the market?
Energy names were the biggest drag on the Dow, with shares of Chevron Corp. /zigman2/quotes/205871374/lastsale CVX -5.38% and Exxon Mobil Corp. /zigman2/quotes/204455864/lastsale XOM -1.16% among the top five contributors to the benchmark’s more than 100 point drop, according to FactSet data.
Chevron, America’s No. 2 oil, company said in a statement Monday that it evacuated all its American oil workers from Iraq following rising tensions in the region, following steps by Exxon to withdraw all of its employees from oil fields in southern Iraq.
The leg lower for the Dow came despite some slightly brighter U.S. economic data and as Wall Street looks ahead to the corporate earnings reporting season for further clues about the health of the economy.
“We are waiting for some of the earnings data to kick in over the next several weeks,” said Jeff Kleintop, chief global investment strategist at Charles Schwab, in an interview with MarketWatch. “Last year, people started pricing in a better 2020 and now we have to see if that is delivered.”
Earlier Tuesday, data showed a rise in activity in the American economy’s huge services sector at year end. The U.S. ISM service sector index rose to a four-month high of 55 in December, according to the Institute for Supply Management. The U.S. Commerce Department also said the trade deficit narrowed in November to a 3-year low, but factory orders fell 0.7% in November, marking the third decline in four months.
Shares of Boeing Inc. gained on rumors a high-profile investor was building a position in the beleaguered aircraft maker.
Meanwhile, investors were digesting rising tensions in the Middle East prompted by the killing of top Iranian Maj. Gen. Qassem Soleimani by the U.S. on Friday.
President Trump said the U.S. remains prepared to attack if Iran retaliates against America, but walked back a threat to target the country’s cultural sites, while speaking at a White House press briefing Tuesday afternoon.
U.S. Defense Secretary Mark Esper on Tuesday said he expects retaliation by Iran in some way, adding that the U.S. isn’t seeking war with the Islamic Republic but would be “prepared to finish one.”