[New York Stock Market] Nasdaq Enters Correction Phase... Three Major Indexes Close Lower Amid Tightening Concerns

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] The three major indices of the U.S. New York stock market all closed lower on the 19th (local time). Despite a slight easing in the sharp rise of bond yields, concerns about early tightening persisted.

In particular, the Nasdaq index, which is centered on technology stocks, continued to decline, falling more than 10% from its peak in November last year. This is interpreted as a result of investors massively selling technology stocks sensitive to interest rates.

On this day in the New York stock market, the Dow Jones Industrial Average closed at 35,028.65, down 339.82 points (0.96%) from the previous session. The S&P 500 index closed at 4,532.77, down 44.34 points (0.97%). The Nasdaq index ended the session at 14,340.25, down 166.64 points (1.15%), entering a correction zone. It is the first time in about 10 months since March 8 last year that the Nasdaq index has entered a correction phase. The Russell 2000, which focuses on small-cap stocks, also showed a decline of 1.46% that day.

Investors showed caution on this day. Although major companies such as Morgan Stanley, Procter & Gamble (P&G), and Bank of America (BoA) posted strong earnings, it was not enough to lead the overall stock market. The New York stock market, which showed gains early in the session, ended lower after a rollercoaster ride. All sectors except consumer staples and utilities showed declines.

In particular, the decline in technology stocks was evident by individual stocks. Tesla's stock price fell 3.38%, breaking the so-called 'CheonTesla'. Nvidia (-3.23%), Apple (-2.10%), and Alphabet A (-0.65%) also retreated. Sony's stock price also fell following Microsoft's announcement the previous day to acquire game developer Activision Blizzard.

Morgan Stanley and P&G, which revealed surprise earnings, saw their stock prices rise 2.5% and 4.1%, respectively. According to FactSet, among the 44 S&P 500 companies that disclosed quarterly earnings, 73% reported results exceeding Wall Street expectations.

Jamie Cox of Harris Financial Group said, "The market will remain cautious for the time being," adding, "Since the FOMC is approaching, there will be no major movements." Mark Newton, chief strategist at Fundstrat, said, "This is evidence that the market is scared," and "The Nasdaq index has not yet reached its bottom."

The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as Wall Street's fear gauge, rose 1.06 points (4.65%) to 23.85 compared to the previous session.

The sharp rise in bond yields has somewhat eased. Due to ongoing concerns about early tightening by the U.S. central bank, the Federal Reserve (Fed), the 10-year U.S. Treasury yield briefly surged to the 1.9% range during the session but fell back to the 1.84% range just before the close.

International oil prices hit their highest level in over seven years again. On this day at the New York Mercantile Exchange (NYMEX), the February West Texas Intermediate (WTI) crude oil price closed at $86.96 per barrel, up $1.53 (1.79%) from the previous session. This is the highest level since October 8, 2014. This was due to heightened geopolitical risks such as Russia's threat to invade Ukraine, the attack on the United Arab Emirates (UAE) oil facilities by Yemen's Houthi rebels, and news of an explosion on an oil pipeline from Iraq to Turkey.

The price of gold, a safe-haven asset, surged. On this day at the New York Commodity Exchange, February gold futures closed at $1,843.20 per ounce, up $30.80 (1.7%) from the previous trading day.