Markets: Equities falter at the start of August

NEW YORK –

Wall Street stocks gave up early gains and tumbled in Monday afternoon trade as investors face another busy week of corporate earnings reports and economic updates.

The S&P 500 fell 0.4% at 2:31 p.m. ET. The Dow Jones Industrial Average fell 70 points, or 0.2%, to 32,772 and the Nasdaq fell 0.3%.

Banks, healthcare companies and technology stocks were among the largest weightings in the benchmark S&P 500 index. JPMorgan Chase fell 1.6%, UnitedHealth Group 1.9% and Intuit 1. .8%.

US crude oil prices fell 4.8%, dragging energy stocks lower. Exxon Mobil lost 2.7%.

Retailers and consumer goods manufacturers made solid gains and offset losses elsewhere in the market. Target rose 1.4% and Procter & Gamble rose 2.9%.

Boeing jumped 6.6% after clearing a major hurdle with federal regulators and could soon resume deliveries of its large 787 jetliner.

The 10-year Treasury yield, which influences mortgage rates, fell to 2.62% from 2.65% on Friday evening.

August’s subdued open follows a strong rally in stocks in July that marked the best month for the S&P 500 index since November 2020. Stocks have fallen for much of the year as investors faltered. worrying about high inflation and rising interest rates. A major concern remains whether central banks will raise interest rates too aggressively and push economies into recession.

The Federal Reserve on Wednesday raised its main short-term interest rate by 0.75 percentage points, taking it to its highest level since 2018. The aim is to slow the US economy to help soften the impact of inflation. An inflation gauge closely watched by the Fed jumped 6.8% in June from a year ago, the biggest increase in four decades.

A spike in oil prices throughout the year only compounded the impact of inflation. U.S. crude oil prices have risen about 25% in 2022, pushing U.S. gasoline prices to record highs.

A report released last week showed that the US economy contracted in the last quarter and could be in recession. The recent rally in equities came as worrying economic reports gave some investors confidence that the Fed can slow its aggressive pace of rate hikes sooner than expected.

Several major companies are reporting results this week, which will give investors insight into the impact of inflation on businesses and consumers. Construction equipment maker Caterpillar and coffee chain Starbucks announced their results on Tuesday. The CVS pharmacy chain publishes its results on Wednesday.

More than half of S&P 500 companies have released their latest results, most of which were better than expected. Many companies have also warned that inflation is hurting consumer spending and squeezing operations. Companies raised their prices in an effort to maintain their profits.

Wall Street will also receive several updates on the labor market, which has remained strong. The Labor Department will release its June job openings and labor turnover survey on Tuesday and its closely watched monthly jobs report for July on Friday.

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