Stocks fall as April selling returns after 1-day respite

U.S. stocks fell Tuesday as the April sell-off continued after a one-day bounce.

The Dow Jones Industrial Average eased about 190 points, or 0.6%. The S&P 500 dipped 0.7%. The Nasdaq Composite retreated 1.1%.

On Monday, the Dow reversed a near 500-point intraday loss to close up more than 200 points. The dramatic market rebound also pushed the S&P 500 and Nasdaq Composite to finish the day higher.

“Quite an impressive reversal, unfortunately we don’t believe that [Monday’s] low is the end of the market’s drawdown,” wrote Rob Ginsberg, technical analyst with Wolfe Research. “The sell-off still feels a bit too orderly to us.”

Monday’s bounce came as stocks have struggled in the past several weeks. The Dow last Friday posted its fourth losing week in a row and the S&P and Nasdaq hit three consecutive down weeks.

The tech-heavy Nasdaq is flirting with bear market territory, sitting about 20.4% from its intraday high. For April, the S&P 500 is off by more than 5%, the Nasdaq is down more than 9% and the Dow is down roughly 2%.

On Tuesday, concerns about global economic growth took center stage again as investors worried about a Covid surge in China and potential lockdowns in Beijing. U.S. Treasury yields declined, with the benchmark 10-year rate falling below 2.8%.

Corporate earnings reports also set the tone Tuesday. Dow component 3M fell about 2% despite better-than-expected earnings as the company noted macroeconomic and geopolitical challenges ahead. UPS shares also fell 3% despite the shipper’s quarterly earnings and revenue topping expectations.

Other industrial names like General Electric and Boeing were lower in early morning trading Tuesday. GE fell more than 7%, while Boeing eased 1%.

Microsoft and Google parent Alphabet both shed about 1% ahead of quarterly reports after the bell. Investors are on edge after Netflix’s disappointing report last week and are looking to a slew of quarterly results this week to assess the mega-cap technology space.

The strength in Big Tech stocks in recent years “is likely to burst when fundamentals start to meaningful deteriorate as the overall economy slows,” Wolfe Research’s Chris Senyek said in a research note.