Stocks fall; Dow in red for the year
The Dow Jones industrial average slipped into the red for the year Monday as stocks extended their slump.
Airlines were among the biggest losers amid concern that capacity growth in the industry may curb profitability. JetBlue Airways, American Airlines and Delta Air Lines were among the carriers that declined.
Stocks have sagged in the last two weeks as investors try to assess whether Federal Reserve policymakers will raise their benchmark interest rate later this year for the first time since the recession. A stronger-thanforecast jobs report Friday suggested that the economy is recovering from its winter slump.
The Fed has kept its benchmark interest rate unchanged at close to zero for more than six years to help support lending and boost the economy. Those low rates have also boosted the stock market in that time, pushing it to record levels.
“The market is suggesting that if the data continue at this pace, the Fed will be more inclined to raise rates in September, rather than waiting,” said Quincy Krosby, a market strategist at Prudential Financial.
The Standard & Poor’s 500 index dropped 13.55 points, or 0.7%, to 2,079.28. The Dow fell 82.91 points, or 0.5%, to 17,766.55, giving it a loss of 0.3% for 2015.
The Nasdaq composite declined 46.83 points, or 0.9%, to 5,021.63.
On Monday, airline stocks were among the biggest decliners as industry executives met in Miami for the International Air Transportation group’s annual general meeting.
American Airlines Chief Executive Doug Parker said he was worried that growth in airline capacity could depress profits.
Analysts at Raymond James cut their earnings forecasts for American Airlines, Delta Air Lines and United Continental.
American Airlines was among the leading decliners in the S&P 500, dropping $1.86, or 4.5%, to $39.86. Delta Air Lines, United, Southwest Airlines and JetBlue also fell.
In energy trading, the price of oil fell as import data suggested a slowdown in Chinese trade, which could lead to weaker global demand for diesel, gasoline and other fuels.
Benchmark U.S. crude fell 99 cents to close at $58.14 a barrel in New York. Brent crude, a benchmark for international oil used by many U.S. refineries, fell 62 cents to close at $62.69 in London
In U.S. government bond trading, prices rose. The yield on the 10-year note fell to 2.38%. The yield had risen to its highest level of the year Friday. The dollar slipped to 124.42 yen from 125.61 yen Friday. The euro strengthened to $1.1298 from $1.1113.
Gold rose $5.50, or 0.5%, to $1,173.60 an ounce.