Australian stocks are slated for a slow start on Tuesday, following a sell-off on Wall Street as technology stocks dragged on.
Key points:
- The Australian dollar fell to 69.10 US cents.
- Technology stocks hit Wall Street on Tuesday
- U.S. energy stocks rose after rising oil prices
The futures of the ASX SPI 200 were flat at 6,596, at 6:45 am AEST.
The ASX 200 closed 127 points, or 1.9 percent, at 6,706 on Monday, extending gains to a third session.
The Australian dollar fell 0.4% to 69.10 US cents.
US stocks closed lower on Monday, after fluctuating early in the session, with the weakness of interest-sensitive megacaps like Amazon.com, Microsoft and Alphabet (Google) among the worst results .
“The reason for the lack of guidance this week and next week is that investors are looking at what will happen in the second quarter reporting period,” said Sam Stovall, chief investment strategist at CFRA Research.
All three indices are on track to achieve two consecutive quarterly declines for the first time since 2015.
The Dow Jones Industrial Average fell 62.42 points, or 0.2%, to 31,438. The S&P 500 lost 11.63 points, or 0.3%, to 3,900. The Nasdaq Composite fell 93.05 points, or 0.8%, to 11,514.
Among the 11 major sectors of the S&P 500, eight ended the session in negative territory. Discretionary consumption suffered the largest percentage loss. Energy values were the clear winners, up 2.8 percent on the day.
Shares of the stock retail platform Robinhood Markets rose 14.0 percent after media reports said Goldman Sachs changed the shares to neutral to sell them.
They also appear to have losses for June, which would mark three consecutive months of declines for the Nasdaq, its longest loss streak since 2015.
Stoval said the S&P was about to report its fifth worst price drop since 1962 since Friday.
“Every time the SPX rose more than 20 percent in one year, it fell an average of 11 percent from the new year,” he said.
“And every year the decline started in the first half broke again even before the end of the year.
“There is no guarantee that this will happen this year, but the market could surprise us on the rise.”
Rising oil prices helped put energy stocks ahead, with small capitalizations and semiconductors and economically sensitive transportation also outpacing the broad market.
Economic data surprised surprisingly, with new durable goods orders and pending home sales exceeding expectations and adding weight to U.S. Federal Reserve Chairman Jerome Powell’s assertion that the economy it is robust enough to withstand the central bank’s attempts to curb decades-high inflation without entering a recession.
Cash gold fell 0.3% and sold for $ 1,823.40
In the oil markets, Brent crude rose 1.9%, $ 115.24 per barrel, while West Texas crude rose 1.9% to $ 109.70 per barrel.
In Europe, the pan-European STOXX 600 index gained (+ 0.5%), along with the German DAX (+ 0.5%) and the British FTSE (+ 0.7%)