Investors dumped stocks for a second day Tuesday, prolonging a break from a huge four-week rally as the market girds itself for potentially grim earnings reports.
Major market barometers all fell more than 2 percent, including the Dow Jones industrial average, which lost 186 points. Trading volume was low, which can amplify swings in the market.
The selling hit a wide range of industries, from financials to energy, in an otherwise quiet day during a holiday-shortened week. The markets will be closed for Good Friday.
Analysts attributed the pullback to profit-taking after a huge advance in March that gave the Dow its best four-week performance in more than 75 years.
Dan Cook, senior market analyst at IG Markets in Chicago, said investors are naturally cautious ahead of the parade of company's quarterly results but that the low expectations could benefit stocks.
"We've already set the bar very low for these companies so it is going to be hard for to disappoint to the downside," he said.
"The real key is going to be bank earnings," said Joe Veranth, chief investment officer at Dana Investment Advisors in Brookfield, Wis. "Really the entire market hinges on that."
On Tuesday, the Dow dropped 186.29, or 2.3 percent, to 7,789.56. The Standard & Poor's 500 index fell 19.93, or 2.4 percent, to 815.55, while the Nasdaq composite index fell 45.10, or 2.8 percent, to 1,561.61.
Though investors have been more optimistic in recent weeks, buoyed by some upbeat news about the economy, many analysts have warned that the rally might not be sustainable if earnings reports come in worse than expected.
"I don't think anybody is making a bet on improvement yet," said Jon Biele, head of capital markets at Cowen & Co. "There is still a very much wait-and-see attitude that is weighing heavily on the market."
No comments:
Post a Comment