U.S. Stocks End On Mixed Note After Cautious Session
U.S. stocks ended mixed on Tuesday as the mood turned cautious around mid afternoon with investors awaiting the passage of the debt ceiling deal.
Stocks, particularly from the technology section, started off on a firm note, although the broad market, however, was somewhat sluggish.
The initial strength came following news President Joe Biden and House Speaker Kevin McCarthy, R-Calif., reached an agreement in principle to raise the debt ceiling and avoid a potentially disastrous default by the U.S. government.
A source familiar with the negotiations told CNN the agreement in principle will raise the debt ceiling for two years and keep non-defense spending roughly flat for fiscal 2024 and increase it by 1 percent in fiscal year.
Stocks turned easy amid concerns the agreement is likely to face opposition from some Republicans who were seeking bigger spending cuts, potentially prolonging the process of passing the bill. Also, traders looked ahead to the monthly jobs report on Friday amid concerns about further interest rate hikes.
The major averages ended mixed. The Dow, which was down in negative territory save for a few minutes at the start, ended with a modest loss of 50.56 points or 0.15 percent at 33,042.78.
The S&P 500 settled at 4,205.52, little changed from the previous close, while the Nasdaq ended up 41.74 points or 0.32 percent at 13,017.43.
In economic news, consumer confidence in the U.S. saw a modest decrease from an upwardly revised level in the month of May, according to a report released by the Conference Board.
The Conference Board said its consumer confidence index edged down to 102.3 in May from an upwardly revised 103.7 in April.
Economists had expected the consumer confidence index to slip to 100.0 from the 101.3 originally reported for the previous month.
Energy stocks declined amid a steep drop in oil prices. Gold stocks fell as well.
Merck, P&G and Visa ended lower by 1.4 to 1.7 percent. Visa, 3M, Caterpillar, Coca-Cola, Microsoft and Chevron also closed weak.
Intel climbed more than 3 percent. Salesforce.com surged 1.6 percent. Apple, Cisco Systems, Amgen, Boeing, Travelers Companies, JP Morgan, Honeywell International and American Express closed with moderate gains.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan’s Nikkei 225 Index rose by 0.3 percent, while China’s Shanghai Composite Index inched up by 0.1 percent.
European stocks ended notably lower as investors stayed cautious, awaiting the passage of the U.S. debt ceiling deal. A drop in eurozone economic sentiment, hawking Fed expectations and concerns around China’s economic recovery also weighed on stocks.
The pan European Stoxx 600 ended 0.92 percent down. The U.K.’s FTSE 100 dropped 1.38 percent, Germany’s DAX ended lower by 0.27 percent, and France’s CAC 40 fell 1.29 percent.
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