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Investing.com – The Dow snapped a three-day winning streak Tuesday as a slump in energy offset gains in leisure and travel stocks amid ongoing optimism on the progress of the economic reopening.
The Dow Jones Industrial Average fell 0.24%, or 82 points, the S&P 500 fell 0.21%, and the Nasdaq Composite slipped 0.03%.
Energy fell more than 1%, weighing on the broader market, paced by declines in Occidental Petroleum (NYSE:OXY), Baker Hughes (NYSE:BKR) and Exxon Mobil (NYSE:XOM).
Still some on Wall Street remain bullish on economically-sensitive cyclicals including energy stocks.
“Strong growth in 2022 with a moderate rise in interest rates … bodes well for our favorable sectors: Industrials, Materials and Energy,” Wells Fargo said.
Travel and leisure stocks continued to trend higher, with airlines and cruise companies in the ascendency on optimism the lifting of restrictions will continue to accelerate travel demand.
Airlines were boosted by several optimistic updates from carriers including American and United Airlines that point to a faster return of demand than expected.
United Airlines (NASDAQ:UAL) raised its guidance on second-quarter revenue amid signs of a recovery in business bookings. Its shares rose more than 1%.
American Airlines (NASDAQ:AAL) also touted expectations for a stronger return to business travel, sending its shares nearly nearly 1% higher.
Consumer confidence in the economy, however, fell short of expectations but economists said this was largely expected following a surge to record highs in April, and the impact of inflation pressures.
“Consumer inflation expectations have been elevated in recent months, which may also be damping their attitudes about their future purchasing power,” Jefferies (NYSE:JEF) said in a note.
Big tech, meanwhile, traded mostly higher, though moves were largely muted as investors appeared reluctant to make big bets ahead of a four-day weekend.
Apple (NASDAQ:AAPL) ended lower, while Google-parent Alphabet (NASDAQ:GOOGL), Amazon.com (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), and Facebook (NASDAQ:FB) were in the green.
Amazon came under the spotlight after the District of Columbia filed a lawsuit against the e-commerce giant, alleging the company prevents sellers on its marketplace from offering lower prices on other websites. Amazon in a reply to an AFP inquiry said: “The DC Attorney General has it exactly backwards – sellers set their own prices for the products they offer in our store.”
Sentiment on tech stocks has been helped by a pause in rising U.S. bond yields as fears over runaway inflation ease, but this will likely prove temporary as incoming inflation data will likely renew inflation jitters.
“We expect yields to resume their rise as a continued surge in the monthly price data challenges the market’s nervously-held view that any inflation increase will be transitory,” Wells Fargo (NYSE:WFC) said in a note.
In other news, Lordstown Motors (NASDAQ:RIDE) closed 8% lower after trimming its production guidance and announcing that it would need to raise more capital amid rising costs.
