Nasdaq, S&P 500 Reach New Record Highs, Dow Posts Modest Loss

(RTTNews) - While the Nasdaq and the S&P 500 climbed to new record closing highs during trading on Tuesday, the Dow moved to the downside over the course of the session after reaching a six-month intraday high in early trading.

The Dow climbed well off its worst levels of the day but still finished the session down 60.02 points or 0.2 percent at 28,248.44. Meanwhile, the Nasdaq advanced 86.75 points or 0.8 percent to 11,466.47 and the S&P 500 rose 12.34 points or 0.4 percent to 3,443.62.

The drop by the Dow came as Exxon Mobil (XOM), Raytheon (RTX) and Pfizer (PFE) moved notably lower following news they are being removed from the blue chip index.

The three stocks will be replaced by Salesforce.com (CRM), Honeywell (HON), and Amgen (AMGN), which posted strong gains on the day.

The changes to the Dow components come as Apple's (APPL) upcoming 4-for-1 stock split will reduce the index's weight in the information technology sector.

Traders were also looking ahead to Federal Reserve Chair Jerome Powell's speech to the Jackson Hole symposium on Thursday.

Analysts have suggested Powell will signal an increased tolerance for higher inflation, with some predicting he will call for a shift to "average inflation" targeting rather than the long-standing 2 percent target.

On the U.S. economic front, the Commerce Department released a report showing a much bigger than expected spike in new home sales.

The Commerce Department released a report showing new home sales spiked by 13.9 percent to an annual rate of 901,000 in July after soaring by 15.1 percent to a rate of 791,000 in June.

Economists had expected new home sales to climb by 1.2 percent to a rate of 785,000 from the 776,000 originally reported for the previous month.

The much bigger than expected jump lifted new home sales to their highest annual rate since reaching 998,000 in December of 2006.

However, a separate report from the Conference Board showed its consumer confidence index slumped to 84.8 in August after tumbling to a downwardly revised 91.7 in July.

The continued decrease came as a surprise to economists, who had expected the index to inch up to 93.0 from the 92.6 originally reported for the previous month.

Sector News

Software stocks moved significantly higher over the course of the trading session, driving the Dow Jones U.S. Software Index up by 1.3 percent. With the gain, the index reached a record closing high.

Biotechnology and semiconductor stocks also saw notable strength on the day, contributing to the advance by the tech-heavy Nasdaq.

On the other hand, oil service stocks gave back ground following the rally seen in the previous session, with the Philadelphia Oil Service Index falling by 1.5 percent.

The pullback by oil service stocks came despite an increase by the price of crude oil, as crude for October delivery climbed $0.73 to $43.35 a barrel.

Other Markets

In overseas trading, stocks markets across the Asia-Pacific region moved mostly higher on Tuesday, although China's Shanghai Composite Index bucked the uptrend and fell by 0.4 percent. Japan's Nikkei 225 Index surged up by 1.4 percent, while South Korea's Kospi spiked by 1.6 percent.

Meanwhile, the U.K.'s FTSE 100 Index tumbled by 1.1 percent on the day, while the German DAX Index and the French CAC 40 Index both ended the session nearly unchanged.

In the bond market, treasuries climbed off their worst levels but remained firmly negative. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 3.6 basis points to 0.682 percent.

Looking Ahead

A report on durable goods orders may attract some attention on Wednesday, although traders may be reluctant to make significant moves ahead of Powell's speech.

On the earnings front, Salesforce.com, Autodesk (ADSK), Hewlett Packard Enterprise (HPE), Intuit (INTU), Nordstrom (JWN), and Toll Brothers (TOL) are among the companies releasing their quarterly results after the close of today's trading.