Dow Reaches New Record Closing High, Nasdaq Pulls Back Sharply

(RTTNews) - After moving notably higher over the course of the previous session, the major U.S. stock indexes turned a starkly mixed performance during trading on Tuesday. While the Dow climbed to a new record closing high, the tech-heavy Nasdaq showed a substantial pullback.

The Dow ended the session off its best levels of the day but still closed up 214.59 points or 0.6 percent at 36,799.65. Meanwhile, the Nasdaq tumbled 210.08 points or 1.3 percent to 15,622.72 and the S&P 500 edged down 3.02 points or 0.1 percent to 4,793.54 after reaching a record intraday high.

The sharp pullback by Nasdaq partly reflected substantial weakness among software and biotechnology stocks.

Reflecting the weakness in the sectors, the Dow Jones U.S. Software Index and the NYSE Arca Biotechnology Index plunged by 2.5 percent and 2.1 percent, respectively.

Healthcare and pharmaceutical stocks also moved notably lower on the day, while energy stocks rallied amid a continued increase by the price of crude oil. Crude for February delivery jumped $0.91 to $76.99 a barrel.

Oil service stocks posted particularly strong gains on the day, resulting in a 4.5 percent spike by the Philadelphia Oil Service Index.

Significant strength was also visible among banking stocks, as reflected by the 3.4 percent jump by the KBW Bank Index.

Banking stocks benefited from a continued increase by Treasury yields, with notable gains by financial giants JPMorgan Chase (JPM) and Goldman Sachs (GS) contributing to the upward move by the Dow.

The continued advance by the Dow also came as traders remain optimistic about the economic outlook even as the U.S. reported more than 1 million new Covid cases on Monday.

Indications the new Omicron variant causes milder symptoms has led to hopes the recent surge could actually help to accelerate the end of the pandemic.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index shot up by 1.8 percent, while Australia's S&P/ASX 200 Index surged by 2 percent.

The major European markets also showed strong moves to the upside on the day. While the German DAX Index advanced by 0.8 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index jumped by 1.4 percent and 1.6 percent, respectively.

In the bond market, treasuries extended the steep drop seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4 basis points to a two-month closing high of 1.668 percent.

Looking Ahead

A report on private sector employment may attract attention on Wednesday along with the minutes of the latest Federal Reserve meeting, which may shed additional light on the outlook for monetary policy.