U.S. Stocks Give Back Ground Following Recent Strength

(RTTNews) - After recovering from an early slump to end the previous session slightly higher, stocks moved back to the downside during trading on Tuesday. The major averages all moved to the downside, although selling pressure remained somewhat subdued.

The major averages climbed well off their worst levels going into the end of the day remained in negative territory. The Dow fell 114.83 points or 0.3 percent to 42,677.24, the Nasdaq slid 72.75 points or 0.4 percent to 19,142.71 and the S&P 500 declined 23.14 points or 0.4 percent to 5,940.46.

The weakness on Wall Street came as some traders looked to cash in on the strong upward move seen over the past several weeks.

The major averages have climbed well off their April lows amid easing trade concerns, with the Nasdaq and the S&P 500 reaching their best levels in almost three months.

However, JPMorgan Chase (JPM) CEO Jamie Dimon has warned stock market values may not properly represent the risks of higher inflation and even stagflation.

"My own view is people feel pretty good because you haven't seen effective tariffs," Dimon said during the financial giant's annual investor day meeting on Monday. "The market came down 10%, [it's] back up 10%. That's an extraordinary amount of complacency."

On the other hand, Carson Group chief market strategist Ryan Detrick told CNBC the rebound should be taken seriously even amid lingering concerns about trade and the economy.

"All these worries and concerns are real. We're not ignoring everything that's out there," Detrick said. "But are we listening to what the market's doing, right?

"The previous 27 trading days, the S&P 500 is up close to 20 percent," he added. "That's not a bear market rally. That's not a short-covering rally,"

While most of the major sectors ended the day showing only modest moves, housing stocks saw notable weakness, dragging the Philadelphia Housing Sector Index down by 1.2 percent.

Transportation and networking stocks also saw some weakness on the day, while gold stocks moved sharply higher along with the price of the precious metal.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index edged up by 0.1 percent, while China's Shanghai Composite Index rose by 0.4 percent and Hong Kong's Hang Seng Index jumped by 1.5 percent.

The major European markets also moved to the upside on the day. While the U.K.'s FTSE 100 Index advanced by 0.9 percent, the French CAC 40 Index increased by 0.8 percent and the German DAX Index climbed by 0.4 percent.

In the bond market, treasuries bounced back near the unchanged line after an early slump. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 4.481 percent after reaching a high of 4.523 percent.