At the end of Monday’s session and early into premarket trading, the S&P 500 seemed ready to work its way through the 4500 handle. However, weakness in the overseas markets and a surprise interest rate cut in China weighed on the rally.
The final nail in the coffin was the warning by the Fitch rating agency that it may downgrade the debt of some of the larger US banks, including JP Morgan & Chase Co. (NYSE: JPM).
The bulls were able to defend a key level, last week’s low (4459), but it was finally breached heading into the last thirty minutes of the session. As a result, the index sliced through that level and was unable to recover by the closing bell.
The end result was a loss of 52 handles at the closing price of 4454. On a longer term basis, the index has been lower in 9 of its last 11 sessions. The two outliers were a 40-handle rally on August 7 and a flat session last Wednesday.
On the individual equities front, NVIDIA Corporation (NASDAQ: NVDA) was the biggest winner of the top components for the second day in a row. Two other Wall Street analysts followed Morgan Stanely’s lead from Monday and boosted its price target on the issue. For the session, the issue added $1.87 or 0.4 % at the closing price of $439.40.
That performance was over 2% better than the cash index’s decrease of 1.16%.
In contrast, Exxon Mobil (NYSE: XOM) was the biggest loser of the top components. The issue snapped a five-day winning streak, declining by $3.76 or 3.38% at the closing price of $108.16.