A trader works on the floor of the New York Stock Exchange.
New York Stock Exchange
The Dow Jones Industrial Average fell on Monday, giving up some of last week’s strong gains, as Treasury yields rose and investors awaited new earnings reports.
the Standard & Poor’s 500 It fell 0.18% to 5853.98. Stock 30 Dao The stock lost 344.31 points, or 0.8%, to close at 42,931.60 points, snapping a series of winning sessions that lasted for three days. the Nasdaq Composite The market was the lowest, rising by 0.27% and closing at 18,540.01.
Consumer and homebuilding stocks were among the biggest losers as concerns about rising long-term interest rates increased. goal Down 3.8% and First Source Builders 5.2% discount. Lennar It also decreased by 4.4%.
Return on Treasury for 10 years It jumped, rising nearly 12 basis points to 4.19%.
“Bond yields continue to rise, which to me means investors now believe the Fed will be slower to cut interest rates because the economy remains resilient,” said Sam Stovall, chief investment strategist at CFRA. “As a result, the Fed is likely to have a more difficult time pushing inflation to its 2% target level in the next year or so.”
Earnings will be key this week, with nearly a fifth of the S&P 500 scheduled to report. Among the companies on deck Tesla, coca cola and General Electric Aerospace.
So far, the results have been mixed. Of the roughly 14% of S&P 500 companies that have already posted third-quarter results, 75% beat expectations, according to FactSet. Analysts have cut their earnings forecasts for the quarter significantly in recent months.
“I don’t think we’re at the beginning of an earnings recession or anything like that, but the bar has been set very, very low… Hardly anyone would injure themselves falling out of a basement window,” Stovall said. “So, with this drop in earnings, chances are this will be the 60th out of the past 62 quarters in which actual results beat end-of-quarter estimates.”
However, investors are largely optimistic that stocks have more room to rise, but recognize that extended valuations, especially ahead of the US presidential election and amid heightened geopolitical risks, could also mean more volatility.
Monday’s moves come after the S&P 500 and the 30-stock Dow Jones hit all-time highs on Friday, fueling a sixth straight weekly advance for both indexes.
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