S&P 500 eases for a 4th day; valuation worries weigh, Home Depot drops

Kitco Media
By Reuters
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Reuters
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NEW YORK, Nov 18 (Reuters) - U.S. stocks eased on Tuesday, with the S&P 500 set for a fourth day in a row of losses as valuation worries hit big technology-related shares and a disappointing forecast pressured Home Depot.

Quarterly results from artificial intelligence and market leader Nvidia (NVDA.O), are due after the bell on Wednesday.

The U.S. earnings season is near its end, but Nvidia's results will be closely watched by investors worried about market gains tied to AI exuberance. Nvidia's shares were down 1.6%.

The September U.S. jobs report is set to be released on Thursday after being delayed because of the long government shutdown. Earlier private market surveys have pointed to a cooling labor market. Data Tuesday showed the number of Americans on jobless benefits surged between mid-September and mid-October.

Shares of Home Depot (HD.N), opens new tab dropped 4.4% after the home improvement chain gave a forecast for full-year profit that disappointed and missed quarterly earnings estimates.

Home Depot aside, earnings for this reporting period have been much stronger than expected. Year-over-year earnings growth for the S&P 500 is now at 16.9%, well above the 8.8% estimated at the start of October, according to the most recent LSEG data.

"You're having this massive sentiment correction during a period where earnings is delivering maybe above bull expectations, and, yet, there's so much fear circulating in the market," said Marta Norton, chief investment strategist at retirement and wealth services provider Empower.

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The Dow Jones Industrial Average (.DJI), fell 315.68 points, or 0.68%, to 46,274.56, the S&P 500 (.SPX), lost 22.75 points, or 0.34%, to 6,649.66 and the Nasdaq Composite (.IXIC), lost 148.12 points, or 0.65%, to 22,559.96.

Concerns over high valuations and dwindling expectations of a December interest rate cut have led to a pullback in U.S. stocks, with the S&P 500 down more than 3% from its October peak.

The CBOE Volatility Index (.VIX), Wall Street's fear gauge, hit a one-month high earlier on Tuesday.

The S&P 500 and the Nasdaq both closed below their 50-day moving averages on Monday, an important technical threshold, for the first time since late April.

There were 55 new highs and 224 new lows on the NYSE. On the Nasdaq, 2,519 stocks rose and 2,084 fell.

Additional reporting by Shashwat Chauhan and Twesha Dikshit in Bengaluru and Chuck Mikolajczak in New York; Editing by Shilpi Majumdar, Krishna Chandra Eluri and Aurora ellis

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