Major indexes hit session lows in afternoon trading. The Dow Jones Industrial Average deepened its losses and fell 0.5% at 1:30 p.m. ET Tuesday.
S&P Global Ratings came down on a group of banks that are witnessing higher funding costs amid deposit outflows. Late Monday, the rating agency lowered its ratings for KeyCorp, Comerica and other banks.
With depositors moving into accounts bearing higher interest rates, funding costs have increased. According to the rating agency, "the decline in deposits has squeezed liquidity for many banks while the value of their securities — which make up a large part of their liquidity — has fallen."
Moody's downgraded several banks earlier in August. The SPDR S&P Regional Banking ETF and the iShares U.S. Regional Banks ETF are now trading below their 50-day moving averages. The KBW Nasdaq Regional Banking Index is in a seven-day losing streak. The iShares SPDR S&P Bank ETF was down 2.2% and is also trading below the 50-day average.
Fed Chair Jerome Powell's speech at Jackson Hole, Wyo., Friday will be one of the week's most watched events.
On Tuesday, Tom Barkin, the Richmond Fed president, said that achieving 2% inflation is vital to the Fed's credibility. The CME FedWatchTool shows an 84.5% chance of rates staying unchanged in September.
Existing-home sales in July fell to 4.07 million after June's 4.16 million, according to Econoday. The yield on the benchmark 10-year Treasury note fell 2 basis points to 4.32%.
S&P 500 Down, Nasdaq Flat
The S&P 500 fell 0.2% while the Nasdaq gave up morning gains and was flat at the hour.
Volume on the NYSE was lower and on the Nasdaq higher vs. the same time Monday.
The small-cap Russell 2000 shed all its early gains and fell 0.5%.
The Innovator IBD 50 ETF performed better and was down just 0.3% in early afternoon trading.
Dow Jones Stocks
In the Dow, Boeing rose slightly after news of a possible deal for its 787-10 aircraft. Goldman Sachs and JPMorgan Chase fell more than 1% along with the larger banking group.
Microsoft rose 0.4% amid negotiations with U.K. regulators for its proposed purchase of Activision Blizzard.
Futures: Rally Attempt, These AI Stocks Await Nvidia Earnings
Stocks Moving Today
VMware rose after news that the company will help enterprises using its cloud infrastructure run generative AI applications such as chatbots, assistants and search. Broadcom is acquiring VMware. According to reports, Broadcom got U.K. approval on Monday for the purchase.
Elsewhere among tech news, longtime leading chip designer Arm filed to go public on the Nasdaq late Monday. Arm chips are used by Google parent Alphabet, Intel, Qualcomm and Apple.
Other bank stocks are falling. Citigroup fell to the lowest since October, while Wells Fargo is deepening a handle in a cup base and is below the 50-day line.
Online brokerage Charles Schwab fell below the 50-day line. Shares are on track to fall for an 11th straight session.
Retail earnings continued Tuesday and they were disappointing. Macy's sold off more than 10% after the retailer issued a cautious outlook. In-store and online sales fell in the July-ended quarter. Inventories fell but so did margins, after markdowns and promotions drove sales.
Dick's Sporting Goods sliced through its 50-day moving average in heavy volume in the stock market today, also on a lower outlook for the year that included comparable sales remaining flat or growing 2% on a 52-week basis. The stock is down more than 23%, on pace for its worst decline ever, according to Dow Jones Market Data.
Spring activity during the second quarter helped home-improvement stock Lowe's, but comparable sales fell 1.6% from the prior year. Lowe's expects a continuing decline in comparable sales of 2%-4% for the full year. Shares are retaking the 50-day line and are in a buy zone from an entry at 219.60. LOW stock gained on a rosy long term view for discretionary spending.
Several retail stocks are falling in sympathy. Target, Lululemon and Best Buy are down in above-average volume. BBY is breaking an area of support at the 200-day line. TGT may be entering a downtrend after falling below the 50-day line on Monday and undercutting its June low. LULU is holding the 50-day for now.
More Retail, Software Earnings Due
Software and other retail results loom. Foot Locker, Kohl's, Snowflake and Splunk will report Wednesday.
Elsewhere, Zoom Video pared some early losses after the videoconferencing company saw earnings grow 28% to $1.34 per share. The stock remains in a long slump. The stock is trading more than 1% lower at the hour.
Among Chinese stocks, e-commerce behemoth Baidu rose more than 3% after earnings spiked 43% to $3.11 per American depositary share. Shares are below the 50-day line and are trying to retake the 200-day line.
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