In this March 23, 2021 file photo, pedestrians walk past the New York Stock Exchange in New York's Financial District. (AP Photo/Mary Altaffer, File)
By Damian J. Troise and Alex Veiga
Technology and energy companies led stocks lower on Wall Street Monday, easing the market back from its recent all-time highs.
The S&P 500 slipped 0.1%, erasing an early gain. Technology companies accounted for a big share of the decline. Industrial and consumer-centric stocks also fell. Those losses outweighed gains in health care companies, banks and elsewhere in the market.
Energy companies slumped the most among S&P 500 stocks as the price of benchmark U.S. crude oil fell 2.6% to its lowest levels since May. The move lower follows a decline of 7.7% last week. Occidental Petroleum shed 3%.
Every major index was coming off weekly gains last week, which ended with record highs for the S&P 500 and the Dow Jones Industrial Average.
The modest pullback is another example of the volatility the market has seen amid uncertainty over the impact COVID-19 variants will have on the economy and the Federal Reserve’s next monetary policy moves, said Sylvia Jablonski, chief investment officer at Defiance ETFs.
“People who got in and saw some of the stocks that they hold at all-time highs on Friday, perhaps they’re selling a little bit off today and might be opportunistically trading some of this volatility,” she said.
The S&P 500 fell 4.17 points to 4,432.35. The Dow dropped 106.66 points, or 0.3%, to 35,101.85. The Nasdaq added 24.42 points, or 0.2%, to 14,860.18.
Smaller companies fell more than the rest of the market. The Russell 2000 index lost 12.95 points, or 0.6%, to 2,234.81.
Bond yields moved higher. The yield on the 10-year Treasury rose to 1.32% from 1.28% late Friday. Bond yields tend to move with expectations for the economy and for inflation.
The latest round of corporate earnings is winding down, and nearly 90% of companies in the S&P 500 have reported their latest results. The reports have been mostly solid. Tyson Foods jumped 8.7% for one of the biggest gains in the S&P 500 Monday after handily beating Wall Street's profit forecasts.
Investors are also closely watching the world's reaction to the latest surge of the coronavirus. Some governments have reimposed limits on business and travel. China canceled flights as it tries to stop a rash of outbreaks. Australia’s two most populous states have told people to stay home except to go to work or for a handful of other reasons.
Analysts expect the U.S. and global economies to continue growing, but have cautioned that the resurgent virus could slow down the pace.
“That's one part of the story and that could be holding back" the stock market, said David Kelly, chief global strategist at JPMorgan Funds. “We don't really have a handle on how bad the delta variant might get.”
Investors have been taking in a steady stream of encouraging economic reports. The latest from the Labor Department shows that U.S. employers posted a record 10.1 million job openings in June. That follows Friday's report that the economy generated 943,000 jobs last month and the unemployment rate fell to 5.4% from 5.9% in June.
The solid jobs figures also raise some concerns about wage inflation and the pace of economic growth.
“We’re burning our way back to full employment fast," Kelly said. “Once we get there the economy is going to slow down.”
The latest figures also raise concerns about inflation fueled by the improving job market, as employers are potentially forced to raise wages to fill jobs.
Investors will get another piece of data on inflation when the Labor Department releases its consumer price index for July on Wednesday. Wall Street is still trying to gauge how much inflation might rise as the economy recovers and whether that will push the Federal Reserve to trim back its support for the economy sooner than expected.
Major indexes Europe edged lower while indexes in Asia ended mixed.
Plant-based meat giant Beyond Meat's reign over the fast food world continues, as McDonald's announced that it is expanding its test of Beyond's McPlant burger, to nearly 600 restaurants, an increase from the eight that it's been testing in since November. This comes less than two weeks after Beyond Fried Chicken made its nationwide debut at KFC restaurants, the first time that plant based chicken has been widely distributed in a fast food capacity. Arun Sundaram, Senior Equity Analyst at CFRA Research explains why these latest collaborations may be proof that Beyond Meat products could slowly be becoming an unlikely staple in the fast food and chain restaurant world as consumers opt for more healthy food options.
It's a big weekend for sports betting, with the NFL conference championships and Australian Open finals expected to bring the industry even more traffic. And if record viewership of the divisional playoff game between the Chiefs and Bills was any indication, sports betting will only continue to grow as football season comes to an end. Joe Raineri, sports betting analyst at SportsGrid, joined Cheddar to discuss how these sporting events could impact the industry, which is expected to get even bigger in 2022.
Ross Gerber, Co-Founder, President, and CEO of Gerber Kawaski Wealth and Investment Management, joins Cheddar News' Closing Bell, where he says now is a great opportunity to buy low on Tesla after shares fell in light of the EV giant's latest earnings report.
High-speed connectivity solutions provider Credo went public on the Nasdaq on Thursday, raising $200 million in its IPO. CEO Bill Brennan, joined Cheddar to discuss its entry into the capital markets and the next chapter for the company. "We're going to be focused on what we have been focused on, which is really creating, creating innovative connectivity solutions that really pushed the edge on efficient power as well as very effective cost," he said.
BD Veritor is a variation of the at-home COVID test that uses a smartphone to interpret the results. The test is taken via a nose swab test strip that is then scanned by your phone’s camera with the result clearly displayed as positive or negative. James Walker, vice president of integrated diagnostics USA for BD, joined Cheddar to discuss how the test hopefully takes the "guesswork out of testing." Walker also went into what BD is doing to deal with the surging demand for at-home tests amid the omicron spread. "While we don't disclose how much we produce, we have capacity to manufacture up to 12 million rapid antigen tests per month and are delivering on our commitments to distributors and retailers," he said.
Citi recently began collaborating with fitness entrepreneur Tracy Anderson to promote its Custom Cash Credit card. Pam Habner, CEO of U.S. Branded Cards for Citi, along with Tracy Anderson, creator of The Tracy Anderson Method, joined Cheddar to discuss how health and fitness matched up with a cash back credit card. "The fact that Citi is going 'hey if you lead a healthy lifestyle, we're going to help you out. We understand that it's more expensive and we're going to give you cash back for living your best life,'" Anderson said about the partnership, which also includes a custom promotional Spotify playlist.
Stocks closed lower Thursday amid continued volatility. The S&P 500 was down 10% from its record high, the Dow was down 7%, and the Nasdaq was 4% away from bear market territory as it closed 16% below its record high. Investors are still processing this week's Federal Reserve announcement about a potential first rate hike in March. Chris Gaffney, President of World Markets at TIAA Bank, joins Cheddar News' Closing Bell to discuss today's close, the Fed's announcement, predictions about interest rate hikes, and more.
