Investor Sentiment Declines Further After Weak China Data

The CNN Money Fear and Greed index showed further decline in overall sentiment among U.S. investors on Tuesday.

The Dow Jones fell more than 300 points on Tuesday, snapping a three-day positive streak. Regional banks moved lower, with the SPDR S&P Regional Banking ETF (KBE) declining around 3% on Tuesday.

China reported disappointing economic reports and the People’s Bank of China slashed interest rates by 15 basis points. China's retail sales rose by 2.5% year-over-year in July, slowing from a 3.1% increase in the previous month. The country’s industrial production rose 3.7% year-over-year in July, slowing from a 4.4% growth in June

On the data front in the U.S., retail sales rose 0.7% month-over-month in July, beating market expectations for a 0.4% growth. Export prices in the U.S. rose 0.7% month-over-month in July, while import prices increased 0.4% month-over-month in July.

The Home Depot, Inc. HD reported better-than-expected results for its second quarter.

All the major sectors on the S&P 500 closed on a negative note, with energy and financial stocks recording the biggest losses on Tuesday.

The Dow Jones closed lower by around 361 points to 34,946.39 on Tuesday. The S&P 500 fell 1.16% at 4,437.86, while the Nasdaq Composite lost 1.14% at 13,631.05 during the session.

Investors are awaiting earnings results from Target Corporation TGT, The TJX Companies, Inc. TJX, JD.com, Inc. JD and Cisco Systems, Inc. CSCO today.

At a current reading of 57.0, the index remained in the "Greed" zone, versus a previous reading of 65.0

What is CNN Business Fear & Greed Index?

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.

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