Market Performance: S&P, Nasdaq, Dow Down as Shortened Week Begins

An Inauspicious Start

Trading on Tuesday began with major market averages trending downward after the long weekend.

Early on, the Nasdaq Composite was down by 1.3%, the S&P 500 by 0.6%, and the Dow by 0.1%.

Rates followed a global trend, with China unexpectedly cutting its five-year lending rate.

Global Precedents and Economic Indicators

“China cut … apparently with a view to boosting the property market,” UBS’ Paul Donovan said. “However, being in deflation, its real interest rate moves are less impressive.”

The 10-year Treasury yield fell 4 basis points to 4.25%, while the 2-year yield fell 7 basis points to 4.57%.

“This week’s UAS data calendar is light – with the Philadelphia non-manufacturing index, FOMC Minutes, Chicago Fed index, claims and existing home sales due,” SocGen’s Kit Juckes wrote. “That tends to argue for rangey rates.”

On the economic front, the Conference Board’s measure of January leading economic indicators declined slightly more than anticipated. The January U.S. Leading Indicator Index came in at -0.4% to 102.7 versus the expected -0.3% figure.