Stocks end mixed as tech’s losses weigh down market
Wall Street’s major stock indexes ended mixed Monday as losses by technology and health care companies outweighed gains elsewhere in the market.
The S&P 500 fell 0.3% after spending much of the day essentially flat. The pullback ended a three-day winning streak for the benchmark index, which last week notched its first weekly gain in three weeks.
The tech-heavy Nasdaq composite fell 0.5%, while the Dow Jones Industrial Average managed a 0.2% gain. Small company stocks fared better than the broader market, sending the Russell 2000 index 1.5% higher.
Bond yields moved broadly higher. The 10-year Treasury yield rose to 1.49% from 1.46% late Friday. It was at 1.31% a week ago, as market jitters drove investors to shift money into bonds, which lowers their yield, but have been climbing since Tuesday.
Banks made solid gains as the 10-year Treasury yield rose. The yield influences interest rates on mortgages and other consumer loans, so when it rises it allows lenders to charge higher rates. Bank of America gained 2.7%.
“The story now is higher bond yields and what areas of the (stock) market benefit,” said Willie Delwiche, investment strategist at All Star Charts.
The S&P 500 fell 12.37 points to 4,443.11; the Nasdaq dropped 77.73 points to 14,969.97; and the Dow gained 71.37 points to 34,869.37. The Russell 2000 picked up 32.93 points to 2,281, a sign that investors are still confident about future economic growth.
The S&P 500 is on pace to shed 1.8% in September, which would mark the first monthly loss since January. Investors have been trying to gauge just how much room the economy has to grow amid waves of COVID-19 crimping consumer spending and job growth while inflation remains a concern.
Microsoft fell 1.7%, and Apple gave back 1.1% as tech stocks helped drag down the S&P 500. The technology sector, which carries an outsizedweight within the index, fell 1% overall.
Health care stocks also weighed on the market. Moderna dropped 5%, and Abbot Laboratories lost 3.1%.
A rise in the price of benchmark U.S. crude oil supported gains for energy stocks. Exxon Mobil rose 3%.
Bank stocks have responded to the surge in bond yields. The KBW Bank Index has risen more than 9% in four days.
The exception Monday was Wells Fargo, which fell 0.8%. The bank settled its latest legal headache by agreeing to pay $37 million over allegations overcharged customers using its foreign exchange services.
The bank has been entangled in numerous scandals the past few years and is still operating under an order from the Federal Reserve that keeps Wells from growing any larger. Sen. Elizabeth Warren of Massachusetts issued a letter this month calling for Wells Fargo to be broken up, citing the bank’s inability to resolve its problems.
Gold for December delivery rose 30 cents to $1,752 an ounce. Silver for December delivery rose 26 cents to $22.69 an ounce, and December copper was unchanged at $4.29 a pound.
The dollar rose to 111.02 Japanese yen from 110.79 yen. The euro fell to $1.1700 from $1.1716.