A trader reacts during the opening bell at the New York Stock Exchange (NYSE) in New York City.
Photo by Johannes Eisele | AFP | Getty Images
The Dow Jones Industrial Average was threatening to enter the history books on Tuesday with its first 9-day losing streak since the 1970s in sight.
The 30-stock average shed 215 points, or 0.5%. The S&P 500 lost 0.5% along with the Nasdaq Composite.
The Dow’s losing streak began the day after it closed above 45,000 for the first time ever earlier in the month.
Dow, 1-month
The Dow anomaly comes at a time when the broader market is doing well. The S&P 500 hit a new high on Dec. 6 and sits less than 1% from that level. The Nasdaq hit a record on Monday.
Driving the Dow’s losses has been a rotation into technology stocks and out of some of the more old economy stocks that gained in November following the reelection of Donald Trump. Those stocks dominate the Dow, rather than tech.
What’s strange however is that Nvidia, a new tech member of the Dow that joined last month, has also struggled despite the tech sector’s recent gains, slipping into correction territory Monday.
Meanwhile Broadcom has been surging to new highs, with investors finding a new chip stock to love. And Alphabet, Apple and Tesla also hit new records on Monday, with the iPhone maker notching a fresh high on Tuesday. Tesla was higher Tuesday, though Broadcom shed 3.6%.
“The Mag 7 performance chasers are taking one last sprint towards 2024 year-end so far in December, leaving the rest of the S&P 500 stocks on the sidelines and kicking the Dow to the curb,” said Jeff Kilburg, CEO of KKM Financial.
Some of the concern driving some profit-taking in the non-technology stocks centers around the upcoming Federal Reserve interest-rate decision on Wednesday. Traders are pricing in a 97% chance of a quarter-point cut, according to CME Group’s Fed Watch tool, however there’s concern among investors and economists that the central bank could be making a mistake and risking a stock market bubble or sparking more inflation.
November’s retail sales figure out Tuesday came in better than economists expected, adding to concern that the Fed may be taking unnecessary action.
