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Weakness in Tech Lowers Stocks         07/27 16:12

   A slide in technology and consumer-oriented companies helped pull stocks 
lower on Wall Street Tuesday, dragging the major indexes below the record highs 
they set a day earlier.

   (AP) -- A slide in technology and consumer-oriented companies helped pull 
stocks lower on Wall Street Tuesday, dragging the major indexes below the 
record highs they set a day earlier.

   The S&P 500 fell 0.5%, snapping a five-day winning streak. The selling was 
most pronounced in technology and communication stocks, and in companies that 
rely on consumer spending. Traders shifted money into sectors seen as less 
risky, including utilities, health care and in companies that make household 
and personal goods.

   Investors also bought bonds, sending the yield on the 10-year Treasury note 
down to 1.24% from 1.27% late Monday. Long-term yields have eased off from 
their sharp rise earlier in the year, but Wall Street is still worried about 

   Markets have been choppy as investors try to get a clearer picture of how 
well the economy is recovering from the pandemic and how the Federal Reserve 
will eventually ease up on its support for the economy. The central bank is 
meeting Tuesday and will release its latest statement on Wednesday.

   "The market is trying to find firmer footing on what to expect going 
forward," said Alan McKnight, chief investment officer at Regions Asset 

   The S&P 500 index fell 20.84 points to 4,401.46. The Dow Jones Industrial 
Average dropped 85.79 points, or 0.2%, to 35,058.52. The tech-heavy Nasdaq lost 
180.14 points, or 1.2%, to 14,660.58.

   Small company stocks also fell. The Russell 2000 index gave up 25.09 points, 
or 1.1%, to 2,191.83.

   Part of the uncertainty hovering over markets has to do with COVID-19 and 
its potential impact on the recovery. Case numbers and hospitalizations have 
been ticking higher in certain parts of the U.S. and world as the Delta variant 

   "The pace of growth is being questioned because of COVID-19 variants," said 
Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. "There 
is some concern that the pace may not be as robust."

   Investors also were monitoring a regulatory clampdown by China on various 
companies. Chinese stocks fell again Tuesday after Beijing announced 
enforcement measures on technology and real estate and was reported to be 
considering restrictions on for-profit education ventures. Authorities say they 
need to protect public safety and financial stability, restrain surging housing 
costs and promote social welfare.

   "In trying to understand the delta variant, what's going on in China, is it 
a fundamental shift in the economic outlook, in the earnings outlook over the 
rest of the year and the beginning of the year?" McKnight said. "We don't think 
that it is, but we acknowledge that it creates volatility, particularly when 
you've already had a large run this year."

   Technology companies and a mix of consumer-oriented companies were among the 
biggest losers Tuesday.

   Wednesday's report from the Fed could give investors more clues about the 
central bank's level of concern about inflation and when it might start 
reducing its monthly bond purchases that have helped keep interest rates low.

   Many companies that have reported quarterly results in recent weeks have 
cited he impact of inflation on their costs. On Tuesday, General Electric and 
Stanley Black & Decker mentioned higher costs.

   "One of the big questions that the market is going to be answering over the 
next couple of months: Are (companies) able to actually implement price 
increases to cover the increase in costs?" McKnight said.

   Investors considered a mixed bag of earnings from several large companies. 
UPS slumped 7% after its revenue for the latest quarter fell short of analysts' 
forecasts. Wall Street brushed off seemingly solid results from several other 
companies. Tesla fell 2% and industrial conglomerate 3M fell 0.6%, despite 
reporting solid financial results.

   The Conference Board reported that consumer confidence edged higher in July, 
marking the sixth straight month that the measurement has risen. The 
International Monetary Fund said it expects the global economy to expand 6% 
this year, a dramatic bounce-back from the 3.2% contraction in the pandemic 
year of 2020.

   The broad declines in the U.S. followed more drops in China. Hong Kong's 
Hang Seng lost 4.2% and the Shanghai Composite lost 2.5%.


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