Markets inch back following early gains

Late afternoon slump keeps Dow from setting new record

A choppy day of trading on Wall Street ended with stocks mostly lower Monday, as a late-afternoon burst of selling derailed the market from another alltime high.

The S&P 500 fell 0.3 percent after having been up as much as 1 percent earlier in the day and on pace to eclipse the record high it set last Thursday. The Dow Jones Industrial Average eked out a 0.1 percent gain, while the Nasdaq shed an early gain and slid 1.3 percent below the all-time high it set on Friday.

Bond yields moved solidly higher. Gold prices fell and energy futures mostly rose.

The market was higher for much of the day as traders were relieved to learn that President Joe Biden would nominate Jerome Powell for a second four-year term at the helm of the Federal Reserve, a vote of confidence in Powell’s handling of central bank policies during the brutal disruptions caused by the coronavirus pandemic.

While stocks initially rallied on the news, bonds sold off, pushing yields broadly higher. The yield on the 10-year Treasury rose to 1.63 percent from 1.54 percent late Friday.

Higher Treasury yields make the more expensive areas of the market, like technology stocks, less attractive, which may explain why there was more selling in stocks toward the end of the day as the bond market shifted.

“Growth areas of (the stock) market do not like higher bond yields,” said Willie Delwiche, investment strategist at All Star Charts. “Energy and financials, however, loved them.”

The S&P 500 fell 15.02 points to 4,682.94. The

Dow gained 17.27 points to 35,619.25. The tech-heavy Nasdaq gave up 202.68 points to 15,854.76.

Small company stocks also fell. The Russell 2000 index dropped 11.81 points, or

0.5 percent, to 2,331.35.

U.S. stocks have been mostly pushing higher since early October as companies reported much stronger profits for the summer than analysts expected. The benchmark S&P 500 has posted a weekly gain in eight out of the last nine weeks, notching successive record highs along the way.

“Powell getting the nod is a sign that Biden is staying the course on monetary policy and the Fed is steadily moving toward normalizing policy,” said Brad Mcmillan, chief investment officer for Commonwealth Financial Network. “On the whole, the Fed is going to continue to be a force for monetary stability.”