By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
NEW YORK (MarketWatch) -- U.S. stock investors remained skittish
on Tuesday, sending the main benchmarks lower as investors sought
havens such as gold and Treasurys.
Perhaps the biggest drag on the market mood was weak European
data, which overshadowed better-than-expected Chinese manufacturing
numbers. U.S. airstrikes in Syria on Monday evening against
extremist fighters, known as the Islamic State, reminded traders of
heightened geopolitical risks.
The S&P 500 (SPX) was 5 points, or 0.3%, lower at 1,989.19.
The Dow Jones Industrial Average (DJI) shed 42 points, or 0.2%, to
17,131.45. The Nasdaq Composite (RIXF) dropped 10 points, or 0.2%,
to 4,517.42.
Chris Gaffney, senior market strategist at EverBank Wealth
Management, said mild weakness in stocks is not surprising after
weak data from overseas, but remains optimistic in the longer
term.
"The environment for stocks remains favorable, as the Fed
continues to stay accommodative. Earnings continue to increase and
there is lack of alternatives. We expect stocks to finish the year
higher," said Gaffney.
"However, we believe the era of rising tides when all stocks
were lifted is over and stock selection is more important," he
added.
Monday's session on Wall Street was grueling for technology and
small-cap stocks, as investors grew nervous about falling commodity
prices and concerns about global economic growth. The Nasdaq
Composite (RIXF) lost 1.1%, while the Russell 2000 (RUT) dropped
1.5%, in its worst trading day since late July. Read: Russell 2000
'death cross' looms
Opinion: Everyone is a genius in a Fed-induced stock rally
In economic data, home prices inched up in July, but growth
slowed down, according to data released Tuesday. The U.S. Markit
'flash' Purchasing Managers Index is due at 9:45 a.m. Eastern. And
a pair of Federal Reserve officials are due to speak, including
Minneapolis Fed President Narayana Kocherlakota, a voting member of
the Fed policy committee, and non-voting member of the Fed policy
committee Kansas City Fed President Esther George.
Stocks to watch: Alibaba Group Holding Ltd. (BABA) fell 1.8%
after a more than 4% drop in the U.S. regular session on
Monday.
CF Industries Holdings Inc. (CF) shares rose 3.43% after it
confirmed merger talks with Norwegian chemical company Yara
International.
Bed Bath & Beyond Inc. (BBBY) will release its
second-quarter results after the close of markets.
Google Inc. (GOOG) shares inched lower after the EU's
competition chief Joaquín Almunia said the search company must
improve its proposed settlement over antitrust concerns or face
formal charges.
Other markets: Hong Kong stocks closed lower, as casino stocks
sold off. European stocks fell 1.2% on weak data. As equities
pulled back, beaten-down gold(GCZ4) and silver (SIZ4) moved up,
while the dollar eased some against major crosses.
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