4:04pm: S&P 500 bulls underwhelmed by lack of movement
The Dow closed Tuesday down 37 points, 0.1%, at 32,395, the Nasdaq Composite fell 53 points, 0.5%, to 11,716 and the S&P 500 dipped 6 points, 0.2%, to 3,971. The small-cap Russell 2000 index lost 4 points, 0.3%, to 1,749.
The S&P's closing figure is not a good sign for bulls projecting a significant move from the index this week, according to Fawad Razaqzada|, market analyst at City Index and FOREX.com.
"The S&P 500 has been coiling around its 200-day average, suggesting that it is gearing up for a potentially sharp move," Razaqzada said. "... [But] bulls will not want to see the index close below Monday’s low around 3968, and certainly don’t want to see it drift back towards Friday’s low at 3905. On Friday, the S&P and several other global indices formed large bullish hammer candles. The bulls now need to see some upside follow-through above these candles."
A bright spot on the day was AMC Entertainment Holdings, shares of which jumped on a report that Amazon was exploring an acquisition of the theater chain.
12.05pm: Growth stocks weaker as 2-year US Treasury yield moves above 4%
US stocks were mixed in noon trading as the yield on the 2-year US Treasury note moved back above 4%.
At midday, the Dow gained 84 points to 32,516, while the S&P 500 eased 2 points at 3,975 and the tech-heavy Nasdaq slipped 64 points to 11,705.
“For the second day in a row, interest rates are rising, and the markets are being led by the more economically sensitive sectors, such as energy and industrials,” Invesco global market strategist Brian Levitt said.
“For the time being, investors seem to be looking beyond the challenges in the financial sector and recognizing that US economic growth continues to be resilient,” he added.
Other notable movers included shares of Alibaba Group Holding Limited, which climbed more than 10% after the e-commerce giant said it would split itself into six different businesses.
9:35am: Sentiment remains fragile
US stocks moved lower at the open on Tuesday as investors digested the latest developments in the banking sector.
The Dow Jones had shed 0.1% at 32,397 points, the S&P 500 was down 0.3% at 3,966 points, and the Nasdaq Composite was down 0.4% at 11,719 points just after the opening bell in New York.
FOREX.com market analyst Fiona Cincotta said stocks were trading modestly lower as bank fears ease but sentiment remains fragile.
“If the banking turmoil is contained then that could mean that the Federal Reserve will need to hike rates further rather than rely on a banking crisis recession to do some of the heavy lifting,” Cincotta said.
“Federal Reserve Governor Philip Jefferson reiterated the Fed commitment to rein in inflation but also noted that it could take some time as some areas of inflation, such as services are proving to be persistent.”
In terms of major movers, Alibaba had added almost 10% at the open on its plans to split into six groups seeking possible initial public offerings (IPOs) and Walgreens Boots Alliance was 1.9% higher after beating quarterly estimates.
6:30am: All quiet for now
Wall Street is expected to open little changed on Tuesday as investors remain cautious despite easing concerns over contagion in the banking sector following the collapse of Silicon Valley Bank (SVB).
Futures for the Dow Jones Industrial Average (DJIA) were flat in pre-market trading, while those for the broader S&P 500 index and contracts for the Nasdaq-100 both eased back around 0.1%.
Regional bank stocks soared on Monday after First Citizens BancShares agreed to buy most of SVB under a deal struck with the Federal Deposit Insurance Corporation (FDIC), helping the S&P 500 notch up its third-straight winning session.
The DJIA closed 0.6% higher at 32,433, while the S&P 500 gained 0.2% to 3,978. But the Nasdaq Composite fell 0.5% to 11,767.
“The Fed added further support to First Republic Bank as First Citizens BancShares stepped in, agreeing to acquire Silicon Valley Bank assets and deposits, both of which have seen a stemming in the stress in regional banking franchises in the US,” commented TickMill Group market analyst Patrick Munnelly.
“However, it is likely too early to call the all clear as some investors remain on the sidelines waiting for the inevitable ‘next shoe to drop’. The overall improvement in the risk tone seen since the weekend has also weighed on interest rate expectations, with some market participants actively betting on rate cuts to begin later this year," he added.
Today, the Federal Reserve’s vice chair of supervision Michael Barr is set to testify in front of the Senate Banking Committee to face questioning on the SVB collapse and the Fed's plans to underpin financial stability in the light of the current crisis.
“The US data docket has little in the way of market moving data today, the only release of note is the conference board's consumer confidence survey which will likely be an early indication of the impact of banking concerns on consumer appetite, which is expected to show a decline for March,” Munnelly noted.