Stocks shake off wobbly start, finish slightly up
Wall Street capped a wobbly day for stocks with modest gains Monday, nudging the major indexes further into record territory.
The S&P 500 shrugged off an early slide and gained 0.2%. Consumer-oriented companies, banks and energy and communications stocks helped lift the market. Those gains were kept in check by a pullback in health care and technology companies. Treasury yields mostly rose.
The modest gains follow a turbulent week for the market. A week ago, stocks fell sharply amid worries that fast-spreading variants of the coronavirus could threaten the economic recovery. But the swoon was short-lived, and the major stock indexes rallied to record highs on Friday.
Trading was more muted Monday, as investors monitored a steady flow of corporate earnings and looked ahead to Wednesday, when the Federal Reserve is due to deliver an update on the economy and its interest rate policy.
Traders will be listening for clues as to when the central bank might start winding down its extraordinary support measures for the economy and how concerned it is about inflation.
“The mood still revolves around inflation and whether it is transitory or not,” said Keith Buchanan, senior portfolio manager at Globalt Investments.
The S&P 500 rose 10.51 points to 4,422.30. The Dow Jones Industrial Average gained 82.76 points, or 0.2%, to 35,144.31. The Nasdaq composite added 3.72 points, or less than 0.1%, to 14,840.71.
Smaller companies fared slightly better than the broader market. The Russell 2000 index rose 7.27 points, or 0.3%, to 2,216.92.
Cruise lines, hotels and retailers were among the winners. Carnival rose 5.5%, Caesars Entertainment added 3.3% and Gap rose 3%.
Treasury yields mostly rose. The yield on the 10-year Treasury rose to 1.30% from 1.28% late Friday. The yield, which is a benchmark for interest rates on mortgages and other consumer loans, has been mostly falling amid increasing unease over the economy since climbing to about 1.75% in late March.
Chinese technology companies slipped as China’s industry ministry announced a 6-month campaign to clean up what it says are serious problems with internet apps violating consumer rights, cyber security and “disturbing market order.”
The announcement pulled most indexes in Asia lower. Hong Kong’s Hang Seng sank 4.1%, marking its biggest drop in more than a year, and the Shanghai Composite index fell 2.3%.
A wide range of companies reported earnings. While the results have been mostly solid, Wall Street’s reaction has been mixed.
Investors are awaiting earnings reports from several large companies this week. Google’s parent company, Alphabet, will report earnings Tuesday, along with Apple and Microsoft.
The dollar fell to 110.39 Japanese yen from 110.56. The euro rose to $1.1800 from $1.1772.