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Stocks - Skeptical Investors Push Wall Street Stocks Lower; Bonds Climb

Investing.com - Stocks drifted lower Tuesday as investors appeared worried about the economic future.

Big growth stocks like UnitedHealth Group (NYSE:UNH) slumped, and there was weakness among a wide array of tech stocks.

The S&P 500 fell 0.32%. The Nasdaq Composite was off 0.34%, and the Dow Jones industrials dropped 0.47%, with UnitedHealth (NYSE:UNH) contributing 55 points of a 121-point loss.

The Dow's loss was equal to about 45% of the Dow's 270-point gain on Monday.

In addition, the 10-Year Treasury yield closed at 1.476%, its first close below 1.5% since August 2016, and the bond market produced an inverted yield curve with the 10-2 Year Treasury Yield Spread ending the day at negative 4.47 basis points, or 4.47 one hundredths of a percentage point.

Long-term rates falling below short-term rates has historically been a signal that, while the economy looks stable now, a recession could be ahead.

Much of Tuesday's drift lower was due to concerns about where the U.S.-China trade fight was headed next. The central government was looking for ways to stimulate the domestic Chinese economy. Gold was higher in response. The Trump Administration was relatively quiet, although President Donald Trump did criticize the Federal Reserve for not cutting interest rates fast enough.

The China uncertainty hit shares of a number of chip companies, which manufacture their products in China or sell chips to Chinese customers. These included Western Digital (NASDAQ:WDC), Micron Technology (NASDAQ:MU), Nvidia (NASDAQ:NVDA) and Xilinx (NASDAQ:XLNX).

Separately, Apple (NASDAQ:AAPL), Cisco Systems(NASDAQ:CSCO), Netflix (NASDAQ:NFLX) and Google parent Alphabet (NASDAQ:GOOGL) were lower.

A number of pharmaceutical stocks fell in response to an Oklahoma judge's decision Monday to order Johnson & Johnson (NYSE:JNJ) to pay $572 million for its involvement in the opioid crisis.

Privately held Purdue Pharma reportedly offered $10 billion to $12 billion to settle litigation it faces.

Teva Pharma (NYSE:TEVA), Mallinckrodt (NYSE:MNK) and Endo International (NASDAQ:ENDP), all facing litigation over rampant opioid use, were down sharply. Johnson & Johnson was actually up 1.4%.


Elsewhere, oil prices moved higher on expectations that oil-producing countries will be cutting production this fall. West Texas Intermdiate was up $1.29 to $54.93 a barrel. Brent crude for October delivery rose 81 cents to $59.51. The November contract closed at $59.03.

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