U.S. stocks snapped their two-day winning streak on Tuesday, as investors digested disappointing retail sales data and moved out of tech stocks on concerns over the high-value AI stocks and their impact on the financial sector. The S&P 500 and the Nasdaq ended in the red, but the Dow continued its northbound journey.
The Dow Jones Industrial Average (DJI) gained 0.1% or 52.57 points, to close at 50,188.14, after closing above the 50,000 mark for the first time on Friday.
The S&P 500 fell 0.3%, or 23.01 points, to end at 6,941.81 points. Financial and healthcare stocks were the worst performers. However, utilities gained.
The Financials Select Sector SPDR (XLF) lost 0.7%. The Health Care Select Sector SPDR (XLV) declined 0.6%. The Utilities Select Sector SPDR (XLU) added 1.7%, while the Real Estate Select Sector SPDR (XLRE) and Materials Select Sector SPDR (XLB) each gained 1.4%. Six out of the 11 sectors of the benchmark index ended in positive territory.
The tech-heavy Nasdaq declined 0.6%, or 136.20 points, to finish at 23,102.47 points.
The fear gauge, CBOE Volatility Index (VIX), was up 2.48% to 17.79. Advancers outnumbered decliners on the NYSE by a 1.47-to-1 ratio. On the Nasdaq, a 1.08-1 ratio favored declining issues. A total of 17.89 billion shares were traded on Tuesday, lower than the last 20-session average of 20.68 billion.
On the Nasdaq, there were 105 new 52-week highs and 107 new lows. On the NYSE, there were 795 new highs and 65 new lows. On the S&P 500, there were 72 new 52-week highs and 11 new lows.
Stocks retreated on Tuesday from the highs attained in the previous session. Retail stocks were among the biggest sufferers after data showed retail sales stalled in December. The Commerce Department reported that retail sales came in flat in December, missing the consensus estimate of a rise of 0.4% as consumer spending slowed. Retail sales climbed 0.6% in November.
Among the worst hit were Costco Wholesale Corporation (COST), with shares declining 2.6%. Shares of The Kroger Co. (KR) fell 3%, while Dollar Tree, Inc. (DLTR) ended the day 1% lower. Costco has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Tech stocks, which rallied in the previous two sessions, once again suffered on Tuesday as concerns grew over how much tech companies need to spend to sustain the AI boom. Shares of big players like Amazon.com, Inc. (AMZN), Alphabet Inc. (GOOGL) and Meta Platforms, Inc. (META) that have pumped in billions of dollars in AI, took a hit on Tuesday.
