Stocks reversed an early rally and closed lower Tuesday despite lower-than-expected inflation data, marking the S&P 500’s and Dow’s sixth decline in the last seven sessions.
Weighing on investor sentiment: economic uncertainties, fears of a corporate tax hike, and a weakening outlook for corporate profits.
O’Neil Global Advisors Chief Investment Officer Randy Watts says signs point to a major pullback for stocks.
“The fact that earnings estimates appear to be plateauing here, or even coming down a little bit is going to give the market an excuse to correct. Longer term, though we still like stocks because we think they're very competitive with bonds, and the big picture, the Fed is still very accommodative.”
The Dow fell eight-tenth of a percent. The S&P 500 and Nasdaq declined roughly a half percent.
The top decliners on the S&P: American casinos with operations in Macau, namely Wynn Resorts and Las Vegas Sands. Investors cut their bets after the Macau government said it’s reviewing the gaming industry, looking at issues such as the number and duration of casino licenses and supervision requirements.
Apple doubled down on 5G connectivity. It unveiled the iPhone 13 with Cinematic mode that enables the phone to automatically change focus while taking videos. It also added new features to its iPad and Apple Watch products. But shares dropped nearly 1%. They’ve now fallen nearly 6% from their all-time high on Sept. 7.