Stocks dip at start of busy week
NEW YORK — Stocks on Monday retreated from their record highs ahead of a frenetic week for markets.
Investors are waiting to learn who the next head of the Federal Reserve will be, what several of the world’s biggest central banks will decide on interest rates, and whether Apple and other big U.S. companies can keep piling their profits higher. In the meantime, reports continued to show that the economy is strengthening, and negotiations continued in Washington on a plan to cut income-tax rates.
Amid the many cross currents, the Standard & Poor’s 500 index fell 8.24 points, or 0.3 percent, to 2,572.83 from the record it set Friday. Losses for health care stocks, telecommunications and other areas of the market overshadowed gains for technology companies and energy producers.
The Dow Jones industrial average fell 85.45 points, or 0.4 percent, to 23,348.74, and the Nasdaq composite dropped 2.30 points, or less than 0.1 percent, to 6,698.96. Smaller stocks fell more than the rest of the market, and the small-cap Russell 2000 index lost 17.42 points, or 1.2 percent, to 1,490.90.
Investors expect President Donald Trump to announce his choice for the next chairman of the Fed by the end of the week. The central bank has played a pivotal role in the economy’s recovery from the recession and the stock market’s leap to record after record.
On Friday, analysts expect that the week’s headline economic report will show that job growth continues to be strong and that the unemployment rate remained at a 16-year low.
Against the backdrop of an economy that’s growing at a 3 percent annual rate, all those ingredients could lead to higher inflation, something that’s been scarce in the global economy for years, said Jim Paulsen, chief investment strategist of the Leuthold Group. That could force the Fed to push rates higher more quickly.
“We’ve rarely had 3 percent back-to-back quarters of growth in this recovery, and we have never had that when we’ve been at 4 percent unemployment,” he said.
The Fed is to start a two-day meeting today. Most investors expect the Fed to raise rates at its December meeting, which would be the third increase of the year.
In overseas stock markets, the French CAC 40 was close to flat, Germany’s DAX added 0.1 percent and the FTSE 100 in London dipped 0.2 percent. Japan’s Nikkei 225 index was virtually flat, South Korea’s Kospi rose 0.2 percent and the Hang Seng in Hong Kong lost 0.4 percent.
In the commodities market, benchmark U.S. crude rose 25 cents to settle at $54.15 per barrel. Brent crude, the international standard, rose 46 cents to $60.90 a barrel.
Natural gas was close to flat at $2.97 per 1,000 cubic feet, heating oil added a penny to $1.88 per gallon, and wholesale gasoline was close to flat at $1.76 per gallon.
Gold rose $5.90 to $1,277.70 per ounce, silver gained 10 cents to $16.85 per ounce, and copper added a penny to $3.11 per pound.
The dollar dipped to 113.18 Japanese yen from 113.81 yen late Friday. The euro rose to $1.1637 from $1.1599, and the British pound inched up to $1.3199 from $1.3125.
Bond yields fell as prices for Treasuries rose. The yield on the 10-year Treasury note fell to 2.36 percent. The two-year yield dipped to 1.57 percent from 1.6 percent late Friday, and the 30-year yield sank to 2.88 percent from 2.92 percent.