Stocks Drop After Rally Amid Selloff in Big Tech: Markets Wrap - Yahoo Finance

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(Bloomberg) -- Stocks dropped on speculation that this month’s rally has outpaced prospects for an economic rebound amid a surge in coronavirus cases around the globe. Treasuries fell.

The S&P 500 declined from a two-month high amid a slide in technology shares, which have led this year’s equity gains. The Nasdaq 100 slumped as much as 2.7% on Tuesday. Amazon.com Inc. sank as the online-retail giant faced an antitrust complaint from the European Union, while American depositary receipts of Alibaba Group Holding Ltd. tumbled after China tightened the scrutiny over big internet companies. Beyond Meat Inc. plummeted after the plant-based burger maker reported sales that trailed Wall Street estimates. The Dow Jones Industrial Average outperformed as Boeing Co. rallied on news that regulators could lift the 737 Max grounding as soon as next week.

After all the enthusiasm that lifted global stocks Monday and sent havens into a tailspin, some analysts said the moves may have gone too far as tough questions remain unanswered. The coronavirus shot still has several hurdles to clear, and concerns about U.S. fiscal stimulus, the transition of power to President-elect Joe Biden and surging virus cases are among some of them. Meanwhile, the S&P 500 is trading at 21.5 times the consensus 2021 earnings estimate -- putting the benchmark’s valuations around the highest level since the dot-com era.

“You still have a tremendous amount of uncertainty out there, and while equities may continue to climb a wall of worry, the stock market is still subject to the rules of gravity,” said Jonathan Boyar, managing director at Boyar Value Group.

China unveiled regulations to root out monopolistic practices in the internet industry, seeking to curtail the growing influence of corporations like Alibaba and Tencent Holdings Ltd. The rules, which sent both stocks tumbling and sparked a wider selloff in Chinese equities, landed about a week after new restrictions on the finance sector that triggered the shock suspension of Ant Group Co.’s $35 billion initial public offering.

Senate Republicans released 12 bills to fund the government through next September, the first move toward negotiations with House Democrats that will be vital to avoiding a federal shutdown next month. Successful talks would remove one element of uncertainty for the U.S. economy, with President-elect Biden’s victory still being disputed by President Donald Trump and a continuing stalemate in separate negotiations over a fiscal stimulus bill.

Read: Goldman Goes All-In for Steeper U.S. Yield Curves as 2021 Theme

Traders also monitored an array of Federal Reserve speakers Tuesday for clues on policy after optimistic news about a coronavirus vaccine on Monday sparked a rebound in wagers for central-bank rate hikes starting in late 2023. Fed Bank of Dallas President Robert Kaplan said “the jury is out on the fourth quarter because of the resurgence of the virus.”

These are some key events coming up:

Alibaba holds its annual Singles’ Day on Wednesday, an online global shopping phenomenon that had $38 billion of sales last year.European Central Bank President Christine Lagarde, Bank of England Governor Andrew Bailey and Federal Reserve Chairman Jerome Powell are among the speakers Thursday at an online ECB Forum entitled “Central Banks in a Shifting World.”U.S. CPI data for October is due on Thursday.Finance ministers and central bankers from the Group of 20 hold an extraordinary meeting Friday to discuss bolder action to help poor nations struggling to repay their debts.

These are some of the main moves in markets:

Stocks

The S&P 500 fell 0.5% as of 11:25 a.m. New York time.The Stoxx Europe 600 Index increased 0.8%.The MSCI Asia Pacific Index fell 0.1%.

Currencies

The Bloomberg Dollar Spot Index was little changed.The euro was little changed at $1.1817.The Japanese yen strengthened 0.1% to 105.28 per dollar.

Bonds

The yield on 10-year Treasuries climbed two basis points to 0.95%.Germany’s 10-year yield rose two basis points to -0.49%.Britain’s 10-year yield increased three basis points to 0.397%.

Commodities

The Bloomberg Commodity Index increased 1%.West Texas Intermediate crude increased 1.5% to $40.89 a barrel.Gold strengthened 1.2% to $1,884.67 an ounce.

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