By Stephen Culp
NEW YORK (Reuters) – U.S. stocks closed on Tuesday after world shares settled lower as a weak sales forecast from chipmaker ASML (AS:) weighed on technology stocks, while crude oil continued its slide on easing supply concerns and a weakening demand.
The three major U.S. indexes ended the session in negative territory, with the Dow Jones Industrial Average and the Dow Jones falling back from Monday’s record highs.
Financial firms Goldman Sachs, Citigroup and Bank of America all posted better-than-expected profits, while results from healthcare companies UnitedHealth (NYSE:) and Johnson & Johnson (NYSE:) disappointed investors.
But Netherlands-based chip equipment maker ASML posted third-quarter results that surprised markets with weak bookings and lower-than-expected sales forecasts, gloomy news that proved contagious for the U.S. chip sector.
“The U.S. stock market is so heavily weighted in technology that it will go where the market as a whole seems to be going,” said Rob Haworth, senior investment strategist at US Bank Wealth Management in Seattle. “But beneath the surface, it’s not bad news across the board.”
“The global story owes more to soft data,” Haworth added.
Energy stocks suffered the steepest percentage decline among the S&P 500’s major sectors, down 3.04% as crude oil prices fell.
The S&P 500 fell 324.60 points, or 0.75%, to 42,740.62, the S&P 500 fell 44.54 points, or 0.76%, to 5,815.31 and fell 187.10 points, or 1.01%, to 18,315.59.
European shares posted their biggest one-day percentage decline in more than two weeks, pressured by technology stocks in the wake of ASML’s disappointing annual sales forecasts.
Meanwhile, investors remained focused on Thursday’s European Central Bank interest rate decision.
The MSCI index for shares around the world fell 6.20 points, or 0.72%, to 850.98. The index fell 0.8%, while the broad European index fell 19.22 points or 0.92%.
Emerging market stocks fell 11.40 points, or 0.98%, to 1,148.66.
Oil prices fell to a near two-week low, extending Monday’s losses due to easing supply pressures from the conflict in the Middle East.
In addition, OPEC and the International Energy Agency have both lowered their global demand forecasts, mainly due to weakness in China.
“Sliding oil prices are disinflationary, which is positive for the broader economy,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. “What you see now is speculation that oil properties in the Middle East will be exempt from attack.”
“And falling oil prices say something about global demand.”
fell 4.40% to $70.58 per barrel while falling to $74.25 per barrel, down 4.14% on the day.
U.S. Treasury yields fell slightly, pausing after hitting a 2.5-month high in the wake of soft manufacturing data from the New York Federal Reserve.
The yield on U.S. 10-year benchmark bonds fell 3.7 basis points to 4.036%, down from 4.073% late on Friday.
The yield on thirty-year bonds fell 5.8 basis points to 4.3237%, from 4.382% late on Friday.
The yield, which typically keeps pace with interest rate expectations, rose 1.1 basis points to 3.952%, up from 3.941% late on Friday.
The dollar was nominally lower against a basket of global currencies amid expectations that the Federal Reserve will make modest interest rate cuts in the near term.
The , which measures the dollar against a basket of currencies including the yen and euro, rose 0.06% to 103.24, while the euro fell 0.2% to $1.0887.
Against the Japanese yen, the dollar weakened 0.37% to 149.2.
Gold gained ground, thanks to lower government bond yields.
rose 0.4% to $2,661.80 an ounce.
(This story has been refiled to add the removed word ‘tech’ in the headline)
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