In this March 23, 2021 file photo, the Fearless Girl statue stands in front of the New York Stock Exchange in New York's Financial District. Stocks fell in morning trading Monday, Aug. 16, 2021 amid rising coronavirus infections in the U.S. and around the globe, as well as geopolitical concerns in Asia. (AP Photo/Mary Altaffer, File)
By Damian J. Troise and Alex Veiga
A choppy day on Wall Street ended Monday with the S&P 500 and Dow Jones Industrial Average notching new highs after recovering from an early slide.
The indexes each rose 0.3%, extending their winning streak to a fifth day, while the Nasdaq fell 0.2%. Technology and health care stocks accounted for much of the gain in the S&P 500. Sectors traditionally considered lower risk, including utilities and companies that make food and personal goods also helped lift the market. Those gains outweighed a pullback in banks, energy stocks and a swath of retailers and travel sector companies.
Despite the latest gains, there are signs that investors have turned cautious with the market at all-time highs amid rising coronavirus infections in the U.S. and around the globe due to the highly contagious delta variant.
Traders shifted money into U.S. bonds, which helped drag bond yields lower. Small company stocks fell, knocking the Russell 2000 index 0.9% lower. Nearly twice as many stocks in the New York Stock Exchange fell than rose.
“Delta is ending up being a cascading concern,” said Sam Stovall, chief investment strategist at CFRA. “It seems the market really doesn’t want to make a commitment for the intermediate or long term.”
The S&P 500 rose 11.71 points to 4,479.71. The Dow added 110.02 points to 35,625.40. The Nasdaq fell 29.14 points to 14,793.76. The Russell 2000 lost 19.69 points to 2,203.41.
Stocks have been pushing to ever higher records the past couple of weeks even amid choppy trading as investors try to gauge the impact of rising virus cases. Analysts had expected economic growth to slow from its breakneck pace earlier this year, but the highly contagious delta variant has prompted even more caution from investors.
The concerns are being heightened as students head back to school or prepare to head back to school at the end of August. School shutdowns because of the virus could crimp a recovery in the job market if parents have to stay home. A resurgence could also stifle the recovery for many businesses that rely on people leaving their homes to eat, shop and get other services.
Data out of China showed the global coronavirus pandemic continues to hurt economies around the world. Chinese industrial production and retail sales both rose last month, but at a far weaker pace than what economists had expected.
China's economy is suffering from supply chain issues, where manufactured goods that would typically be on their way to foreign markets have either remained unfinished or stuck in shipping containers. The pandemic has made hiring workers harder as well.
The collapse of the Afghanistan government over the weekend was also on investors' minds. While the economy of Afghanistan is small, the country is located in a delicate part of the world, sandwiched between the economic giants of South and East Asia and the oil-rich Middle East.
The price of U.S. crude oil fell 1.7% and weighed down energy companies. Exxon Mobil dropped 1.5% and Chevron closed 1% lower.
Shares in some retailers and tourism-related companies also fell. Caesars Entertainment slid 4% and Gap dropped 3.1%.
Bond yields fell and pulled banks lower. They rely on higher yields to charge more lucrative interest on loans. The yield on the 10-year Treasury fell to 1.26% from 1.29% late Friday. Wells Fargo lost 1.9% and Citigroup dropped 1.4%.
Also dampening investors' optimism was the University of Michigan consumer sentiment index from Friday, which fell to 70.2 from its previous level of 81.2 in July. That was the largest drop in sentiment since April 2020, when the pandemic took its initial grip on the country.
The unexpectedly bad reading was almost entirely due to the spread of the delta variant of the coronavirus, which has caused hospitals to fill up with unvaccinated patients across the U.S.
While many still remain skeptical about the metaverse, big tech firms and even one big bank are ready to expand their virtual worlds. Facebook parent company has pivoted so hard it will now call its employees 'Metamates,' and even JPMorgan Chase has created its own digital lounge on one virtual platform. While the sector remains young, there seems to be significant investment opportunity, especially with companies like Nvidia. Adam Johnson, a portfolio strategist at Adviser Investments, joins Closing Bell to discuss which companies could win in this space, consumer appetite, and more.
Marc Blinder, Co-Founder and CEO of Aikon, joins Cheddar News' Closing Bell, where he discusses how his company is helping businesses use blockchain applications without needing to learn the intricacies of the new technology.
The Federal Reserve minutes from its January meeting are indicating it's sticking to an interest rate hike in March, but what does the report coupled with ongoing inflation mean for investors going forward? Scott Brown, a market strategist at LPL Financial, joined Cheddar News to break down the minutes and talk about how investors might navigate the rest of the year. "it seems like the market is kind of inclined to trade off these headlines, really, through the first half of the year," he said. "And then, oh, don't forget, we've got midterm elections, which always tend to add a little bit of volatility in the second half of the year." Brown noted that the path forward for stock investors in 2022 would be "rockier" than last year.
Season 13 "Shark Tank" contestant Tania Speaks secured a $400,000 deal for her Speaks Organic Skincare brand with "Shark" Mark Cuban while also being named one of the best pitches in the history of the show — all at 19 years old. Now 20, Speaks joined Cheddar News to talk about the skincare line, the clean beauty industry, and the moment that host Cuban was moved by her pitch. "I couldn't believe that he got emotional. I'm surprised I held back my tears that long," the young entrepreneur revealed. "It's just amazing for someone else to be inspired by your story, especially Mark Cuban himself."
The media giant formerly known as ViacomCBS has officially rebranded itself as Paramount Global with a focus on its streaming service, Paramount Plus. Naveen Chopra, chief financial officer at Paramount, joined Cheddar to discuss the company’s name change and streaming wars. "There are components of content licensing that we continue to do, either historical arrangements or opportunities to license content that don't really impinge on what we're trying to do with our owned and operated services and that continues to be an important ingredient in our broader financial model," he said. "But our number one priority is putting our best assets on Paramount Plus." Chopra also discussed theatrical release windows before feature films hit its service and the platform's subscription goals.
The recent 7.5% year-over-year increase in consumer prices is the highest since 1982, and drew some strong reactions from investors, with speculations that the Federal Reserve will hike interest rates by 50 points instead of 25. But other analysts believe that the Fed will stick with its original plan of 25 points next month. Chris Vecchio, Senior Analyst, at DailyFX broke down how the Fed could potentially react to the historically high inflation data.
Ride share competitors Uber and Lyft both posted their fourth quarter earnings days apart from each other. Both companies have been trying to get back on their feet after taking some pandemic-related hits, but the Omicron variant had other ideas as the year came to a close, with each company taking a hit in ridership in December. Lance Ippolito, head trader at The Future of Wealth explains how Uber and Lyft measured up this earnings period and why Uber may still have an edge over the competition.
