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Dow Ends Deeper in Red on Late-Selling as Tech Pares Gains

Stock MarketsMay 18, 2021 04:07PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The Dow closed lower on sharp selling into the close Tuesday as tech stocks gave up gains and energy shares were dragged lower by falling oil prices on fears an Iran nuclear deal will boost global oil supplies.   

The S&P 500 fell 0.89%, the Dow Jones Industrial Average fell 0.78%, or 267 points,  and Nasdaq Composite fell 0.57%. 

Tech struggled to hold onto gains as ongoing concerns the rotation to value from growth still has room to go kept gains in check.

"While there are some minor technical indicators implying the value/growth ratio may be extended / overbought on a short-term basis, we see more room ahead for relative outperformance in value," Dan Wantrobski, associate director of research at Janney Montgomery Scott wrote in a note.

Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB), Google-parent Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT) and Amazon.com (NASDAQ:AMZN) were below the flatline.

Apple also caught some unwanted attention. The New York Times reported Monday the tech giant had compromised on security by storing data of its Chinese consumers on computer services run by a Chinese-government controlled firm. The company denied claims in the report. "We never compromised the security of our users or their data in China or anywhere we operate."

Tesla (NASDAQ:TSLA) shrugged off reports that famous shorts-seller Michael Burry reportedly has initiated a $534 million bet against the stock.

Energy was the biggest laggard as oil prices slumped on fears of a wave of Iranian supply amid reports that a nuclear deal will be sealed on Wednesday. A Russian envoy, however, clarified that there had been no major breakthrough in Iranian nuclear talks, though significant progress had been made.  

The reopening trade - bullish bets on stocks tied to the progress of the economic reopening – remain in demand, shaking off the broader market struggles as Covid-19 restrictions continue to ease.

Casino and travel stocks were among the top gainers in the consumer discretionary sector, with MGM Resorts (NYSE:MGM), Carnival (NYSE:CCL) and Wynn Resorts (NASDAQ:WYNN) in the ascendency.

On the earnings front, Walmart (NYSE:WMT) was the standout performance, closing up 2% after reporting better-than-expected first-quarter results, driven by strong grocery and e-commerce sales. The supermarket giant also raised its outlook on full-year sales.  

Macy’s ended roughly flat despite posting a surprise first-quarter profit and raised its full-year guidance amid ongoing momentum as the pace of reopening of the economy gathers pace.

On the economic front, housing data that fell short of economists' forecast was largely shrugged off as home-building activity remains elevated.

"Winter storms caused a sharp pullback [in housing starts] in February and an even bigger bounce in March," Jefferies (NYSE:JEF) said. "The April pullback looks like a return to trend, which is still upward sloping."

President Joe Biden's fiscal agenda, meanwhile, was also back in the spotlight as Treasury Secretary Janet Yellen backed a reform of the corporate tax system to fund the president's infrastructure plan.

Dow Ends Deeper in Red on Late-Selling as Tech Pares Gains
 

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Comments (13)
Investing Man
Investing Man May 19, 2021 12:08AM ET
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Like cnbc all these articles are like post game announcers. Talk a lot but offering nothing to change the game
trevor hron
trevor hron May 18, 2021 6:35PM ET
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Lots of divergences of money flow and order flow starting to show up more. Price has been slowly trending down while money flow and distribution are moving down much quicker. I think we could see substantial weakness if the tape gets any more red.
franklin neversoy
franklin neversoy May 18, 2021 5:41PM ET
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So tomorrow will be meaningless until 1pm
mohammad nourbakhsh
mohammad nourbakhsh May 18, 2021 5:13PM ET
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full sell dow
New Jazenevd
New Jazenevd May 18, 2021 5:02PM ET
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The market stagnates while gold trends higher. It indicates cracks in investor confidence, more people start understanding that stupid tales, propagated by fake media, about “good transitory inflation” that is not even linked to mass money printing... are just this....stupid tales.
Adrian White
Adrian White May 18, 2021 5:02PM ET
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Nope. The current "transitory inflation" is caused by supply chain shortages, and greater demand vs supply as the country opens back up. Not from the printing of money. We'll see slight deflation kick in later in the year. Trillions of dollars printed over the last several years haven't caused any inflation, so what makes you think it suddenly happens now? The real inflation is in financial assets, not regular asset prices.
New Jazenevd
New Jazenevd May 18, 2021 5:02PM ET
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Adrian White  No one printed and spent as much as Burisma Joe. It results in strong inflation that you try to ignore.
Charles Barnes
Charles Barnes May 18, 2021 5:02PM ET
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Ma Am
Ma Am May 18, 2021 5:02PM ET
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New Jazenevd you mean both administrations. Stop acting like one is innocent. Both need to get it together and stop printing
Thomas Monteiro
Thomas Monteiro May 18, 2021 4:49PM ET
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FED minutes tomorrow.. investors are playing a little safe just in case something goes wrong
robert bucklew
robert bucklew May 18, 2021 4:49PM ET
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everything the fed does is wrong
Mario tragik
Mario tragik May 18, 2021 4:35PM ET
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imvesting.com tomorrow: " big tech eases loses as investors are optimistic and buy the dip." lol these headlines, its like justifying each single 5 min that moves up or down.
Mox Mox
Mox Mox May 18, 2021 4:35PM ET
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at least they are not Reuters: stock market falls because Trump and white men
Mike Caldera
Mike Caldera May 18, 2021 4:33PM ET
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Yeah, I'd say algorithms are screaming get the h out now.
Zach Backar
Zach Backar May 18, 2021 4:32PM ET
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Stay away in May is the trade. Wait till the Suites make enough to money to enjoy their Summers in the Hamptons. Buy at the end of August into the Fall. I seen this Movie 🎥 too many time before.
Atlantic Coast Money
Atlantic Coast Money May 18, 2021 4:32PM ET
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That is my exact play. Wait for second quarter numbers to come out. Buy the selloff.
Jimmy Tsang
Jimmy Tsang May 18, 2021 4:32PM ET
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Inflation is a must when economy is growing? 2009: 10 yr bond rate 2.68% with unemployment rate at 10%! Oil $41!2011: 10 yr bond rate 3.15%, oil $113!! Dow went up 70% from 2009!
Atlantic Coast Money
Atlantic Coast Money May 18, 2021 4:22PM ET
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Late selling in the day is very bearish.
David Lowe
David Lowe May 18, 2021 4:22PM ET
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Buy great companies and hold them for a long time.
Mox Mox
Mox Mox May 18, 2021 4:22PM ET
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David Lowe like Blackberry???
Atlantic Coast Money
Atlantic Coast Money May 18, 2021 4:22PM ET
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David Lowe wait until after 2nd quarter
trevor hron
trevor hron May 18, 2021 4:22PM ET
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Definetly when it was so strong. It was like the beginning of a water fall. I wonder if someone seen something coming up thats bad news?
Garvit Garg
Garvit Garg May 18, 2021 4:22PM ET
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no its been down without any reasons its the profit booking👍
William Smith
William Smith May 18, 2021 4:20PM ET
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Down on Yellen's tax speech.
franklin neversoy
franklin neversoy May 18, 2021 4:20PM ET
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She didn’t help plus lousy housing report
 
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