Market decline

Energy and banking stocks collapse and drive global market down | New

Banks and energy companies helped pull stocks mostly lower on Wall Street on Tuesday, ending the S&P 500’s seven-day streak of record close.

The benchmark index fell 0.2% after declining 0.9%. The Dow Jones Industrial Average fell 0.6%. Tech stocks rose, helping the Nasdaq to make a modest gain that pushed the index to an all-time high.

Oil prices retreated after surging overnight when talks between OPEC cartel members and allied oil-producing countries broke down amid a standoff with the United Arab Emirates over oil levels. production. The news led to lower energy stocks.

Bond prices rose, sending the 10-year Treasury yield to its lowest level since February. Falling bond yields weighed on banks, causing the S&P 500 to fall.

“We’ve had a very strong movement this week,” said Mark Hackett, chief investment researcher at Nationwide. “It’s almost natural to have a pullback when you have that kind of movement.”

The S&P 500 lost 8.80 points to 4,343.54. The index hit seven consecutive records from June 24 to last Friday, gaining 2.6% during that period. It is now up 15.6% for the year.

The Dow Jones lost 208.98 points, or 0.6%, to 34,577.37, while the Nasdaq Composite was up 24.32 points, or 0.2%, to 14,663.64. The high-tech index also set a record on Friday.

The Russell 2000 Small Stock Index posted some of the biggest losses, slipping 31.26 points, or 1.4%, to 2,274.50.

The market sell-off began early following a report showing that growth in the service sector, where most Americans work, slowed in June after a record expansion in May.

Longer-term Treasury yields fell as the report suggested this year’s spike in inflation may have already peaked and nervousness increased in the market.

The 10-year Treasury yield fell to 1.36% from 1.44% on Friday and returned to its February level. It had recovered sharply earlier this year, fearing inflation could reach dangerous levels as the economy came back to life.

The report said the prices paid by US service companies rose at a slower pace last month. Exam gloves and masks have become cheaper, for example, and the U.S. service sector price index slowed to 79.5 in June after peaking at 80.6 in May, according to the Institute. for Supply Management. Any reading above 50 indicates growth.

More generally, growth in the service sector slowed last month, and more than economists expected. This fits with Wall Street’s growing belief that growth in many areas of the economy is peaking or has already been.

“What I took from this is that economic growth is slowing,” said Sam Stovall, chief investment strategist at CFRA.

The report would also give credit to the Federal Reserve’s insistence that inflation appears to be only a temporary problem.

Falling yields have put pressure on banks, which rely on higher yields to charge more lucrative interest on loans.

Oil prices fell due to a dispute between oil producers over production levels. The benchmark US crude oil price fell 2.4% to $ 73.37; it previously stood at $ 76.98, the highest level since November 2014.

Falling oil prices weighed on energy companies. Exxon Mobil fell 2.8% and Chevron fell 2%.

The market is currently in a summer lull with investors having little to do until next week when the corporate earnings season resumes. Investors face a shortened vacation week this week, as stock markets were closed on Monday.

Amazon jumped 4.7% after the Pentagon announced it was canceling a cloud computing deal with Microsoft that could have ended up being worth $ 10 billion and that it would pursue a deal with Microsoft and Amazon instead. Microsoft stocks have changed little.