NEW YORK: U.S. stocks ended near flat on Tuesday after a broad sell-off the day before, with worries over troubles at developer China Evergrande and uncertainty ahead of Wednesday’s Federal Reserve policy news keeping a lid on the market.
Concerns over China Evergrande Group have put investors on edge amid coronavirus and economic growth worries.
Persistent default fears overshadowed efforts by Evergrande’s chairman to boost confidence in the firm on Tuesday; while Beijing showed no signs it would intervene to stem any effects across the global economy.
“People have been preconditioned to buy pullbacks for most of the last year plus,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
“But that overhead nervousness is still there,” he said. “The Evergrande situation is still a black cloud hanging over global markets. Combine that with uncertainty with Fed commentary coming tomorrow and there’s a reluctance to get overly aggressive on the long side.”
Investors are waiting for the end of this week’s Fed meeting that may shed light on when its massive purchase of government debt will begin to ease.
Officials will reveal new projections as investors also are on alert for any timing on rate tightening.
Unofficially, the Dow Jones Industrial Average fell 47.93 points, or 0.14pc, to 33,922.54, the S&P 500 lost 3.58 points, or 0.08pc, to 4,354.15 and the Nasdaq Composite added 32.50 points, or 0.22pc, to 14,746.40.
The S&P 500 index traded below its 50-day moving average, its first major breach in more than six months. The average has served as a floor of sorts for the index this year.
Analysts say a breach of the index’s 200-day moving average is now in sight.