Asian Morning: US Market Sees Rotation Out of Tech Stocks

Wall Street sign with a building in background
On Tuesday U.S. stocks closed lower. Amid states reopening their economy, investors moved out of technology stocks and into economically sensitive value stocks.

The Dow Jones Industrial Average eased 32 points (-0.1%) to 24,101, the S&P 500 slipped 15 points (-0.5%) to 2,863, while the Nasdaq 100 shed 160 points (-1.8%) to 8,677.


Source: GAIN Capital, TradingView


Media (-2.36%), Health Care Equipment & Services (-2.3%) and Pharmaceuticals Biotechnology & Life Sciences (-2%) sectors lost the most. 

Cincinnati Financial Corporation (CINF -12.5%), Arconic (ARNC -10.4%), United Parcel Service (UPS -6.0%) were among the biggest losers.
 
On the other hand, Harley-Davidson (HOG +15.2%),  Norwegian Cruise Line (NCLH +14.4%), Alaska Air (ALK +13.4%) and American Airlines (AAL +12.4%) performed the best.
 
Ford Motor (F +4.1%) said in after-market hours that its second-quarter loss would widen to over $5 billion from $2 billion in the first quarter due to the coronavirus pandemic.
 
On the technical side, about 25.6% (23.0% in the prior session) of stocks in the S&P 500 Index were trading above their 200-day moving average, and 91.9% (80.0% in the prior session) were above their 20-day moving average.

U.S. official data showed that Wholesale Inventories (preliminary reading) fell 1.0% on month in March (-0.4% expected). The Conference Board's Consumer Confidence Index dropped to 86.9 in April (87.0 expected). 

Later today, the U.S. government will report first-quarter GDP growth (an annualized rate of -3.9% on quarter expected). The Federal Reserve is expected to keep its benchmark interest rate unchanged at 0.00%-0.25%.

U.S. Treasury Secretary Mnuchin said he expects the U.S. economy to pick up in June and July before bouncing further by August and September.

European stocks charged higher, with the Stoxx Europe 600 Index advancing 1.7%. Germany's DAX rose 1.3%, the U.K.'s FTSE 100 increased 1.9% and France's CAC was up 1.4%.

U.S. Treasury prices rebounded before the Fed concluded its two-day monetary policy meeting. The benchmark 10-year U.S. Treasury yield dropped to 0.610% from 0.655% Monday.

Spot gold was down for a third session as it declined 2 dollars to $1,708 an ounce.

Following a 25% plunge in the prior session, U.S. WTI crude oil futures (June) fell a further 3.4% to $12.34 a barrel, and Brent crude oil futures gained 2.5% to $20.48 a barrel.
 

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