Stocks fell slightly in morning trading on Wall Street on Tuesday as the market emerges from its worst month since the pandemic began nearly two years ago.
The S&P 500 fell 0.3% at 10:16 a.m. EST. The Dow Jones Industrial Average fell 31 points, or 0.1%, to 35,100 and the Nasdaq fell 0.7%.
Technology stocks occupied the most important place in the market. Apple fell 1.1% and Microsoft 1.3%. The sector has been particularly sensitive to concerns about rising interest rates this year. Higher interest rates tend to make expensive growth stocks, like big tech companies, less attractive to investors.
Industrial stocks made strong gains, led by a 12.3% rise in UPS after the parcel delivery service reported results much better than analysts had expected. Rival FedEx rose 4%.
Banks also gained ground as bond yields rose. The yield on the 10-year Treasury, which is used to set rates on mortgages and many other types of loans, rose to 1.81% from 1.77% on Monday evening. Bank of America rose 1%.
Stocks have fallen so far this year as investors face a long list of threats to economic growth and markets.
The economic recovery is threatened by a persistent rise in inflation which has increased costs for businesses and consumers. The big fear is that higher prices passed on to consumers will eventually cut spending and dampen economic growth.
The Federal Reserve changes its monetary policy and plans to raise interest rates to combat rising inflation, which will affect investments and stock prices. Ultra-low rates and other stimulus helped markets recover from the initial shock of the coronavirus pandemic and then underpinned stunning gains. Investors expect the Fed to start raising interest rates in March, but there is a lot of uncertainty about how far and how quickly the Fed will act throughout the year. .
The virus pandemic is still a lingering threat and each new variant could lead to a surge of cases that threatens businesses and consumer activity.
Investors are looking at the latest set of results, in part to see how inflation, the virus pandemic and other factors affect companies and their operations going forward.
Exxon Mobil rose 5.2% after reporting surprisingly strong fourth-quarter earnings as oil demand continued to improve.