Wall Street falls further from its records as bitcoin hits all-time high

NEW YORK (AP) — U.S. stocks are falling further from their records on Tuesday, as a lull for Wall Street this week continues.

The S&P 500 was 0.8% lower in morning trading and on track for a second straight dip after closing last week at an all-time high. The Dow Jones Industrial Average was down 167 points, or 0.4%, as of 10:30 a.m. Eastern time, and the Nasdaq composite was 1.7% lower.

Apple’s drop of 3% was one of the heaviest weights on the market. It’s been struggling on worries about sluggish iPhone sales in China, where tough competition and a faltering overall economy are challenging it.

MicroStrategy fell 9.6% after it said it will raise $600 million in debt, which it will use to buy more bitcoin and for “general corporate purposes.”

Bitcoin briefly rose above $69,000 Tuesday, surpassing its record set in 2021, before pulling back to roughly $68,000. It’s been surging in part because of new exchange-traded funds that offer easier access for investors to the cryptocurrency. It’s roughly tripled over the last 12 months.

Target was helping to support the market after climbing 12.1%. It reported a bigger jump in profit for the end of 2023 than analysts expected as it held the line on some expenses.

New York Community Bancorp was also rising, up 9.3%, a day after it plunged 23%. The bank is under heavy pressure because of losses tied to investments it has related to commercial real estate. It’s also under heavier regulatory scrutiny because of its purchase of much of Signature Bank, one of the banks that fell in last year’s mini-crisis for the industry.

Several analysts still say NYCB’s problems are likely unique to it, more than a signal of a coming tsunami for banks broadly, particularly after U.S. government efforts last year to bolster the industry. But if interest rates remain high, more pressure could build on the entire industry.

Hopes for coming cuts to interest rates got a boost when a report in the morning showed that growth for U.S. construction, health care and other services industries slowed by more last month than economists expected.

Perhaps more importantly, the report also said prices paid by services businesses rose at a slower pace in February than in January. A separate report, meanwhile, said U.S. factory orders weakened by more in January than expected.

Wall Street’s hope has been that the economy will continue plugging along, but not at such a strong pace that it keeps upward pressure on inflation. That’s because traders want the Federal Reserve to cut interest rates this year, something it’s hinted it will do only if inflation cools decisively toward its 2% target.

Following Tuesday’s reports, bets built among traders that the Federal Reserve will begin cutting interest rates in June. The Fed’s main rate is at its highest level since 2001 in hopes of grinding down inflation. Any cuts would relieve pressure on the economy and financial system.

Fed Chair Jerome Powell will give testimony before Congress later this week, which could further sway expectations for when cuts to rates could begin.

In the bond market, the yield on the 10-year Treasury fell to 4.13% from 4.22% late Monday.

In stock markets abroad, Hong Kong’s Hang Seng index sank 2.6% after China’s premier said the country’s target for economic growth this year is around 5%, in line with expectations. China’s economy expanded at a 5.2% annual rate last year after growth dipped to 3% in 2022.

Li Qiang, addressing the opening meeting of China’s National People’s Congress, also said Beijing would issue 1 trillion yuan ($139 billion) in long-term bonds to help bridge funding gaps, provide support to financially strapped local governments and invest in both advanced technology and in social support and education.

But the government’s intention to keep its deficit at 3% of China’s overall economy may have disappointed investors hoping for more aggressive action.

Stocks in Shanghai inched up by 0.3%, while indexes were modestly lower across much of the rest of the world.

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AP Business Writers Elaine Kurtenbach and Matt Ott contributed.