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Stocks Close Mixed as Post-Evergrande Rebound Fizzles

TheStreet logo TheStreet 9/21/2021 Rob Lenihan
a group of people looking at a computer: Stocks Close Mixed as Post-Evergrande Rebound Fizzles © TheStreet Stocks Close Mixed as Post-Evergrande Rebound Fizzles

Stocks finished mixed Tuesday after the rebound from the biggest single-day decline in nearly four months sparked by China's indebted property giant Evergrande lost steam.

The Dow Jones Industrial Average finished down 50 points, or 0.15%, to 33,919, while the S&P 500 slipped 0.08%. The tech-heavy Nasdaq advanced 0.22%.

"We've been arguing that the US economy is in good shape -- the recent COVID-surge notwithstanding -- and continuing to improve, however, markets were likely to experience at least a 5% pullback (potentially more) at some point this year and that it was worth keeping focused on the bigger picture," said Chris Zaccarelli, CIO for the Independent Advisor Alliance.

Housing starts for the month of August rose 3.9%, well ahead of the consensus forecast of a 1% gain, taking the annual pace to around 1.615 million units. Permits for new construction were also notably higher, rising 6% on the month to an annual pace of 1.723 million units.

Video: Market Selloff, Evergrande, Pfizer: Jim Cramer's Stock Market Breakdown - September 20 (TheStreet)

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Nearly all of the August gains, however, were linked to multifamily homes, with new single-family home starts fell 2.8% from July to 1.076 million units.

Lennar ended slightly lower after the country's second-largest homebuilder added its name to the list of companies concerned about supply chain disruptions to the housing market.

"Housing starts coming in strong is a good thing for the economy but it's hard to tell if the market will care," said Mike Loewengart, managing director of investment strategy at E*Trade Financial. "Center stage today is if we'll see a sustained bounce back from yesterday's selloff."

Loewengart said investors have been pretty bullish throughout the pandemic so yesterday's dip could have been an entry point for some. However, he added, "we have been due for a real correction for some time, and concerns about the Chinese economy's recent softening are lurking."

DraftKings slumped following a report that the U.S.-based online gaming company is planning a $20 billion takeover bid, financed mostly with stock, for Britain's Entain Plc.

Johnson & Johnson JNJ finished slightly higher after the drug maker published data showing that a second shot of its coronavirus vaccine provided a significant increase in protection against the disease in a large-scale U.S. trial.

This article was originally published by TheStreet.

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