U.S. Stocks Seeing Modest Weakness Amid Focus On Debt Ceiling Talks
Stocks have moved modestly lower during trading on Tuesday, with the major averages all moving lower following the mixed performance seen in the previous sessions. Selling pressure has been somewhat subdued, however, limiting the downside.
Currently, the major averages are off their lows of the session but still in the red. The Dow is down 0.83 points or less than a tenth of a percent at 33,285.75, the Nasdaq is down 20.89 points or 0.2 percent at 12,699.86 and the S&P 500 is down 9.12 points or 0.2 percent at 4,183.51.
Ongoing concerns about the U.S. debt ceiling and a potential default are weighing on Wall Street following a meeting between President Joe Biden and House Speaker Kevin McCarthy, R-Calif., on Monday.
A statement from Biden described the meeting as “productive” and said he “reiterated once again that default is off the table.”
“While there are areas of disagreement, the Speaker and I, and his lead negotiators Chairman McHenry and Congressman Graves, and our staffs will continue to discuss the path forward,” Biden said.
Trading activity remains relatively subdued, however, as traders await more concrete developments regarding raising the debt ceiling.
Later this week, the Commerce Department’s report on personal income and spending is likely to be in focus, as it includes a reading on inflation said to be preferred by the Federal Reserve.
The minutes of the Fed’s latest monetary policy meeting are also likely to attract attention, as traders look for additional clues on the outlook for interest rates.
On the U.S. economic front, the Commerce Department released a report showing new home sales in the U.S. unexpectedly spiked to their highest level in a year in the month of April.
The report said new home sales jumped by 4.1 percent to an annual rate of 683,000 in April after surging by 4.0 percent to a revised rate of 656,000 in March.
Economists had expected new home sales to decrease to an annual rate of 670,000 from the 683,000 originally reported for the previous month.
With the unexpected increase, new home sales reached their highest level since hitting a rate of 707,000 in March of 2022.
Housing stocks have shown a notable move to the downside on the day, with the Philadelphia Housing Sector Index down by 1.0 percent. The index continues to give back ground after hitting its highest intraday level in over a year last Friday.
Pharmaceutical, steel and gold stocks are also seeing some weakness, while banking, airline and oil stocks have moved significantly higher.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan’s Nikkei 225 Index fell by 0.4 percent, while China’s Shanghai Composite Index plunged by 1.5 percent.
The major European markets have also move do the downside on the day. While the French CAC 40 Index has tumbled by 1.1 percent, the German DAX Index is down by 0.3 percent and the U.K.’s FTSE 100 Index is down by 0.1 percent.
In the bond market, treasuries have bounced back near the unchanged line after seeing early weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 3.723 percent.
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