Wall Street dips as growth shares offset energy gains

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Wall Street’s main indexes fell on Tuesday as growth stocks extended declines, overshadowing a rise in energy shares after oil prices pared back gains on OPEC+ output concerns.

Market participants also focused on recent protests in China amid hopes that it could lead to a quicker easing of COVID-19 curbs by its government.

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“China is a mixed picture because the protests create uncertainty, but at the same time, could be a catalyst for eventually a loosening in COVID policy,” said Carl Ludwigson, managing director at Bel Air.

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Gains in growth stocks earlier in the day proved short-lived, while U.S. Treasury yields rose. Investors also sold Treasuries as they anticipate details about Amazon.com Inc’s highly anticipated multi-tranche corporate bond deal.

Shares of Microsoft Corp, Apple Inc, Netflix Inc and Amazon were down between 0.9% and 1.9%.

“We’ve got a reasonably strong rally into the fourth quarter. It’s an opportunity perhaps to add to fixed income, which is more likely to do its job next year than it did this year, as the problem goes from inflation to economic growth,” Ludwigson said.

The benchmark S&P 500 index is now headed for its second straight month of gains in November amid hopes of the U.S. Federal Reserve hiking interest rates in smaller increments and a handful of inflation readings showing a slight cooling in prices.

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So far, the Fed has delivered four straight 75 basis point rate hikes, but is expected to shift down the pace to a 50-bps move in December.

All eyes are now on Fed Chair Jerome Powell’s speech on Wednesday for hints on how the central bank continues to deal with inflation.

A survey on Tuesday showed U.S. consumer confidence eased further in November amid persistent worries about the rising cost of living.

The S&P 500 energy sector index was up only 0.6%, after rising as much as 2% earlier in the session. Oil prices pared gains on concerns that OPEC+ would keep its output unchanged at its December meeting.

At 12:24 p.m. ET the Dow Jones Industrial Average was down 109.35 points, or 0.32%, at 33,740.11, the S&P 500 was down 16.33 points, or 0.41%, at 3,947.61, and the Nasdaq Composite was down 63.14 points, or 0.57%, at 10,986.36.

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U.S.-listed shares of Chinese companies Alibaba Group Holding Ltd, Pinduoduo Inc and JD.com Inc rose between 5.7% and 8.9% as China broadened equity financing channels for property developers.

Shares of Chinese internet firm Bilibili Inc jumped 22.2% after posting upbeat quarterly results.

Advancing issues outnumbered decliners for a 1.40-to-1 ratio on the NYSE and a 1.17-to-1 ratio on the Nasdaq.

The S&P index recorded no new 52-week high and one new low, while the Nasdaq recorded 43 new highs and 123 new lows. (Reporting by Shreyashi Sanyal and Ankika Biswas in Bengaluru; Editing by Anil D’Silva and Shounak Dasgupta)