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Market Snapshot: Dow down 280 points, with tech shares under heavy pressure

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Market Snapshot

Shares of CVS rise after quarterly results

U.S. Treasury Secretary Janet Yellen will speak Tuesday.

Brendan Smialowski/Agence France-Presse/Getty Images

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Stocks fell in early trading Tuesday, led lower by heavy losses for tech-related shares, a day after the S&P 500 index and the Dow Jones Industrial Average put in a strong start to May, pushing the equity benchmarks near records.

Investors will watch for comments from Treasury Secretary Janet Yellen, who will be making two appearances, including a live-streamed interview hosted by The Wall Street Journal, as they assess earnings from Pfizer and CVS.

How are stock benchmarks performing?
  • The Dow Jones Industrial Average

    fell 224.67 points, or 0.7%, to 33,888.56.

  • The S&P 500

    was off 46.21 points, or 1.1%, at 4,146.45.

  • The Nasdaq Composite

    dropped 305.08 points, or 2.2%, to 13,590.04.

On Monday, the Dow advanced 238.38 points, or 0.7%, ending at 34,113.23, its third-highest close in history; the S&P 500 added 11.49 points, or 0.3%, to close at 4,192.66, its second-highest finish ever; while the Nasdaq Composite fell 67.56 points, or 0.5%, finishing at 13,895.12, as it posted back-to-back declines.

What’s driving the market?

Tech-related shares were leading the move to the downside, with heavyweights Tesla Inc.
, Inc.
and Google parent Alphabet Inc.


each down more than 2%, while Apple Inc.

shares were off 3%.

See: Epic CEO: I decided to sue Apple because of App Store’s ‘negative impact’

Investors are weighing the strength of corporate earnings and the economic resurgence from the COVID pandemic against worries about inflation and concerns that prices for equities don’t have much further room to run higher given current valuations.

MarketWatch’s Mark Hulbert notes that by one measure stock valuations are higher than 98% of monthly readings since 1881, and more than double the 140-year average, suggesting an extremely overvalued market.

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“The stock market is cautious,” said Kristina Hooper, chief global market strategist at Invesco, in a Tuesday note.

“After all, stocks have already rallied dramatically, and there are concerns about the unsustainability of the current very positive environment given that government debt is growing and higher taxes are expected,” she wrote. “This caution is also borne of being monetary policy-dependent, because sticky inflation could be around the corner, and that might force the Fed to remove the punch bowl.”

Read: Stock market peak? The ‘easy money’ has been made, but there’s still room for gains

Yellen may provide more insights about the economic outlook and President Biden’s infrastructure spending plan. She is scheduled to participate in a forum hosted by The Atlantic magazine at 11 a.m. Eastern, and to appear at a virtual summit at 4 p.m. hosted by The Wall Street Journal.

On Monday, a closely watched manufacturing report from the Institute for Supply Management for the U.S. disappointed, falling to 60.7% in April from a 38-year high of 64.7% in the prior month. Economists surveyed by Dow Jones and The Wall Street Journal had forecast the ISM index to edge up to 65%.

In economic data Tuesday, the U.S. trade deficit rose 5.6% in March to a record $74.4 billion, reflecting a robust appetite for consumer goods as the economy gains speed.

Data showed U.S. factory orders rose 1.1% in March.

On the public health front, the U.S. Food and Drug Administration is expected to authorize Pfizer’s COVID-19 vaccine for ages 12 to 15 by next week, according to the Associated Press, citing a federal official and a person familiar with the process, setting up shots for many before the beginning of the next school year. Meanwhile, India is second to the U.S. by cases at 20.3 million and third by fatalities at 222,408.

Which companies are in focus?
  • Shares of CVS Health CorpCVS rose 3%, after the drugstore chain and healthcare services company reported first-quarter profit and sales that rose above expectations, with growth in all segments, and raised its full-year outlook.

  • Shares of Pfizer IncPFE  were off 0.1%, after the drug giant beat earnings expectations and raised its full-year outlook, as revenue expectations for its COVID-19 vaccine jumped 73%. 

  • Precipio Inc.’s stock 

    soared 44%, adding to gains of more than 170% on Monday, after the specialty diagnostics company, said its COVID-19 rapid antibody test is now available on’s AMZN business platform.

  • Shares of DuPont IncDD fell 1.2% after the specialty materials, chemicals and agricultural products company reported first-quarter profit and sales that beat expectations, with all of its business segments showing growth, and raised its full-year outlook. 

  • Arconic Inc. ARNC shares rose 14%, after the company posted better-than-expected first-quarter earnings and raised guidance, citing higher aluminum prices and strong orders from the aerospace sector. 

  • Shares of ConocoPhillips COP pulled back 1.2%, after the oil-and-gas company reported first-quarter earnings that beat expectations, and announced the resumption of share repurchases and plans to start selling off its Cenovus Energy Inc. CVE stake.

How are other assets faring?
  • In Europe, the Stoxx Europe 600 SXXP was off 1.3%, while London’s FTSE 100

    shed 0.5%.

  • The 10-year Treasury note yield TMUBMUSD10Y fell 4.6 basis points to 1.558%.

  • The greenback was stronger, trading up 0.3% based on the ICE U.S. Dollar Index DXY.

  • Gold futures GC00 were up 0.3% near $1,797 an ounce on Comex. U.S. crude futures CL.1 traded 1.1% higher at $65.18 a barrel on the New York Mercantile Exchange.

  • In Asian trade, Hong Kong’s Hang Seng Index HSI rose 0.7%. Bourses in Shanghai and Tokyo were closed.

Read full story

The world risks ‘running out of copper’ — and here’s how high prices may rise as the economy reopens, BofA warns

Copper inventories are falling low just as the global economic reopening gets under way, according to BofA. “If scrap supply doesn’t come through, stocks would deplete by 2024,” the bank’s commodity strategists warn.

William Watts is MarketWatch’s senior markets writer. Based in New York, Watts writes about stocks, bonds, currencies and commodities, including oil. He also writes about global macro issues and trading strategies. Before moving to New York, he reported for MarketWatch from Frankfurt, London and Washington, D.C.

Mark DeCambre is MarketWatch’s markets editor. He is based in New York. Follow him on Twitter @mdecambre.

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