Stocks end wobbly day down, falling below recent highs
Posted on Monday, August 9, 2021 | 1:50 p.m.
Updated 15 minutes ago
Technology and energy companies led stocks lower on Wall Street on Monday, relieving the market of its recent all-time highs.
The S&P 500 slipped 0.1%, erasing an early gain. Tech companies accounted for a significant portion of the decline. Industrials and consumer-focused stocks also fell. These losses outpaced the gains of healthcare companies, banks and elsewhere in the market.
Energy companies fell the most among S&P 500 stocks, as the price of benchmark US crude oil fell 2.6% to its lowest levels since May. This drop follows a 7.7% drop last week. Occidental Petroleum lost 3%.
Every major index posted weekly gains over the past week, which resulted in record highs for the S&P 500 and the Dow Jones Industrial Average.
The slight pullback is another example of the volatility the market has experienced amid uncertainty over the impact COVID-19 variants will have on the economy and the Federal Reserve’s upcoming monetary policy actions, said Sylvia Jablonski, chief investment officer at Defiance ETFs.
“People who walked in and saw some of the stocks they are holding at record highs on Friday, maybe they’re selling a bit today and could opportunistically trade some of that volatility,” he said. she declared.
The S&P 500 lost 4.17 points to 4,432.35. The Dow Jones lost 106.66 points, or 0.3%, to 35,101.85. The Nasdaq added 24.42 points, or 0.2%, to 14,860.18.
Small businesses have fallen more than the rest of the market. The Russell 2000 Index lost 12.95 points, or 0.6%, to 2,234.81.
Bond yields have increased. The 10-year Treasury yield fell from 1.28% Friday night to 1.32%. Bond yields tend to move with expectations about the economy and inflation.
The latest round of corporate earnings is drawing to a close and nearly 90% of S&P 500 companies have released their latest results. Reports have for the most part been solid. Tyson Foods jumped 8.7% for one of the S&P 500’s biggest gains on Monday after handily beating Wall Street earnings forecasts.
Investors are also closely monitoring the world’s reaction to the latest wave of coronavirus. Some governments have reimposed limits on business and travel. China has canceled flights as it tries to stop a wave of epidemics. 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 US and global economies to continue growing, but have warned that the resurgence of the virus could slow the pace.
“It’s part of the story and it could put the brakes on the stock market,” said David Kelly, chief global strategist at JPMorgan Funds. “We don’t really have a clue how bad the delta variant is.”
Investors have received a constant stream of encouraging economic reports. The latest from the Department of Labor shows that American employers posted a record 10.1 million job postings in June. This 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.
Strong employment figures also raise concerns about wage inflation and the pace of economic growth.
“We are quickly coming back to full employment,” Kelly said. “Once we get there, the economy will slow down.”
The latest figures also raise concerns about inflation fueled by improving labor market conditions, as employers are potentially forced to raise wages to fill positions.
Investors will get more inflation data when the Labor Department releases its consumer price index for July on Wednesday. Wall Street is still trying to gauge how far inflation could rise as the economy recovers and whether that will cause the Federal Reserve to reduce its support for the economy sooner than expected.
The main European indices fell slightly while the Asian indices ended mixed.