Stocks regained ground after an early move to the downside during trading on Tuesday but still ended the day mostly lower. With the drop on the day, the major averages partly offset the strong gains posted in the previous session.
The major averages all finished the day in negative territory. The Dow slid 167.09 points or 0.6 percent to 29,783.35, the Nasdaq dipped 24.79 points or 0.2 percent to 11,899.34 and the S&P 500 fell 17.38 points or 0.5 percent to 3,609.53.
Profit taking contributed to the initial pullback on Wall Street after the strength seen in the previous session lifted the Dow and the S&P 500 to new record closing highs.
The advance seen on Monday came amid more upbeat news regarding a potential coronavirus vaccine, although a continued spike in cases weighed on the markets.
Data from John Hopkins University showed more than 166,000 news coronavirus cases on Monday, with the total number of cases in the U.S. now exceeding 11 million.
Negative sentiment was also generated in reaction to a report from the Commerce Department showing retail sales rose by less than expected in the month of October.
The report said retail sales rose by 0.3 percent in October after jumping by a downwardly revised 1.6 percent in September.
Economists had expected retail sales to climb by 0.5 percent compared to the 1.9 percent spike originally reported for the previous month.
Excluding an increase in sales by motor vehicle and parts dealers, retail sales edged up by 0.2 percent in October after surging up by 1.2 percent in September. Ex-auto sales were expected to increase by 0.6 percent.
Gregory Daco, Chief U.S. Economist at Oxford Economics noted retail sales are 4.9 percent above their pre-Covid levels but called the near-term outlook "concerning."
"While phase one of the recovery proved that fiscally supported incomes can be potent drivers of spending on goods, we should not fall for alluring rearview mirror economics," Daco said.
He added, "Phase two of the recovery is significantly slower with muted employment gains and reduced fiscal aid weighing on incomes, and a worsening Covid outbreak once again limiting activity across the country."
Meanwhile, the Federal Reserve released a separate report showing a significant rebound in U.S. industrial production in the month of October.
The Fed said industrial production jumped by 1.1 percent in October after falling by a revised 0.4 percent in September.
Economists had expected production to surge up by 1.0 percent compared to the 0.6 percent drop originally reported for the previous month.
The National Association of Home Builders also released a report showing U.S. homebuilder confidence improved to another new record high in November.
Sector News
Utilities stocks moved sharply lower over the course of the trading session, dragging the Dow Jones Utility Average down by 2 percent. The average gave back ground after ending the previous session at its best closing level in over eight months.
Considerable weakness was also visible among gold stocks, as reflected by the 1.3 percent drop by the NYSE Arca Gold Bugs Index.
The weakness in the gold sector came amid a modest decrease by the price of the precious metal, with gold for December delivery slipping $2.80 to $1,884.50 an ounce.
Meanwhile, natural gas stocks showed a substantial move to the upside on the day, driving the NYSE Arca Natural Gas Index up by 2.1 percent to its best closing level in well over two months.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan's Nikkei 225 Index rose by 0.4 percent, while China's Shanghai Composite Index dipped by 0.2 percent.
The major European markets also ended the day mixed. While the French CAC 40 Index crept up by 0.2 percent, the German DAX Index closed just below the unchanged line and the U.K.'s FTSE 100 Index slid by 0.9 percent.
In the bond market, treasuries moved higher following the modest drop seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.4 basis points to 0.872 percent.
Looking Ahead
Following the slew of U.S. economic data released this morning, the Commerce Department is scheduled to release its report on new residential construction in the month of October on Wednesday.
Traders are also likely to keep an eye on earnings news from Lowe's (LOW), Target (TGT) and TJX Companies (TJX), which are due to report their quarterly results before the start of trading.
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