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 fell 0.89%, the fell 0.78%, or 267 points, and 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:), Facebook (NASDAQ:), Google-parent Alphabet (NASDAQ:), Microsoft (NASDAQ:) and Amazon.com (NASDAQ:) 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:) 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:), Carnival (NYSE:) and Wynn Resorts (NASDAQ:) in the ascendency.
On the earnings front, Walmart (NYSE:) 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, 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:) 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.
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