The Dow Jones Industrial Average (INDEXDJX:.DJI) edged higher Tuesday, hovering near its record close above 52,000, but the advance was heavily concentrated in just two stocks, masking broader market weakness. At about 11 a.m. EDT, the Dow was quoted near 52,276, up about 94 points, or 0.18%, after closing above the 52,000 milestone for the first time on Monday.
The S&P 500 (INDEXSP:.INX) gained 0.48%, while the Nasdaq Composite (INDEXNASDAQ:.IXIC) rose 0.95%, with technology stocks again leading the charge. However, beneath the surface, market breadth was negative. At 10:08 a.m. ET, declining issues outnumbered advancers by a 1.33-to-1 ratio on the NYSE and 1.29-to-1 on the Nasdaq, according to Reuters, even as the Dow was essentially flat.
Two-Stock Lift Masks Broader Weakness
The Dow's gain was almost entirely attributable to Caterpillar Inc (NYSE:CAT) and Apple Inc (NASDAQ:AAPL). Together, these two stocks contributed roughly 210 points to the index at 10:36 a.m. ET, more than the Dow's 159-point gain at that time. This implies that the remaining 28 stocks in the index collectively dragged the Dow down by about 51 points. Caterpillar rose $30.91, contributing about 184 points, while Apple added $4.41, contributing about 26 points.
MarketWatch noted that each $1 change in a Dow component was worth about 5.94 index points on Tuesday, underscoring the outsized impact of the two stocks.
Macro Data Mixed
Economic data released Tuesday provided a mixed picture. The Bureau of Labor Statistics reported that job openings rose by 9,000 to 7.594 million in May, beating the Reuters economist forecast of 7.30 million. However, hiring fell by 45,000 to 5.170 million, and the share of consumers saying jobs were hard to get rose to 22.5%, the highest since January 2021.
Meanwhile, the Conference Board's consumer confidence index rose to 91.2 in June from a revised 90.6 in May, but fell short of the Reuters poll forecast of 94.7. Dana Peterson, the group's chief economist, noted that labor-market views "softened measurably."
Despite the mixed data, markets still expect at least one Federal Reserve rate hike this year, according to Reuters.
Alphabet Joins the Dow
The Dow's composition changed this week, with Alphabet Inc (NASDAQ:GOOGL) replacing Verizon Communications Inc (NYSE:VZ) on Monday. The change increases the index's exposure to digital advertising, cloud computing, and artificial intelligence. Alphabet rose 3.7% to $350.24 on its first day in the index, providing another significant boost.
"Investors can't see an end in sight to this bull run," said David Morrison, senior market analyst at Trade Nation. Brian Levitt, chief global market strategist at Invesco, noted that tech had been in "a period of June gloom."
Monday's record close came after stocks rebounded from selling in tech. The Dow gained 306.63 points, or 0.59%, to 52,182.74; the S&P 500 rose 1.18%; and the Nasdaq climbed 2.07%. Peter Cardillo, chief market economist at Spartan Capital Securities, said "the market is looking forward" to earnings season.
