© The Financial Times Ltd 2015 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
Last updated: August 6, 2013 10:56 pm
The materials sector led a sell-off in US equities on Tuesday, as investors fled growth-focused stocks including Monsanto and US Steel.
The other cyclical sectors were also trading lower, with financials and industrials areas off 0.9 per cent and 0.8 per cent respectively.
Big US banks, which have fared well in 2013, were sold off broadly, with Citigroup 2.6 per cent lower to $51.48, Goldman Sachs down 2.1 per cent to $164.78, JPMorgan Chase off 1.1 per cent to $55.49, and Bank of America 1.1 per cent lower to $14.64.
The S&P 500 fell 0.6 per cent to 1,697.37, with all ten major sectors trading lower. The Nasdaq Composite index was off 0.7 per cent to 3,665.77, and the Dow Jones Industrial Average lost 0.6 per cent to 15,518.74.
The sell off came ahead of a 1pm eastern-time speech by Charles Evans, president of the Federal Reserve Bank of Chicago, which will be closely watched for signs that the Fed will soon begin winding down its quantitative easing program.
However, the early selling was more indicative of caution and seasonal factors rather than an aggressive indication of a bearish outlook, said Quincy Krosby, market strategist at Prudential Financial.
“We’re not seeing major selling. You may not see major buying, but you’re not seeing some sort of selling panic and that’s important,” she said.
“Overall, this has not been a market that is afraid. It doesn’t seem to be afraid of geopolitical risk, it doesn’t seem to be afraid of higher interest rates, it doesn’t seem to be afraid of the tapering announcement.”
IBM was the hardest hit of the blue-chips, off 2.3 per cent to $190.99. The information technology company was downgraded to “underperform” from “neutral” by Credit Suisse.
It has been a difficult year for one of the largest IT companies in the world, with the day’s fall sending IBM shares into negative territory for 2013. The company has disappointed investors with tepid earnings projections and slipping pre-tax profits.
The holding company, which will still be owned by the Graham family, has been acquiring companies outside of the newspaper industry and will continue to operate its other businesses including education services provider Kaplan, a series of television stations, and The Slate Group, the online magazine.
Among the biggest movers on the day were two retailers whose earnings sent their shares in opposite directions.
Fossil Group was the best performing stock in the S&P 500 for the morning after the fashion brand reported second-quarter earnings per share that easily beat estimates. Its shares leapt 17.8 per cent to $126.50.
American Eagle Outfitters, however, fell 12 per cent to $17.57 after the clothing retailer warned that its profit in the most recent quarter would come in much lower that previously expected.
Concerns about the clothing retail market sent rival clothing company Abercrombie & Fitch down 4.1 per cent to $49.57.
Copyright The Financial Times Limited 2015. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.
Sign up for email briefings to stay up to date on topics you are interested in