Wall Street Starts the Week Mixed 06/27 16:06
Wall Street Starts the Week Mixed
Wall Street capped a wobbly day of trading with a mixed finish Monday,
giving back some of the market's gains following a rare winning week.
(AP) -- Wall Street capped a wobbly day of trading with a mixed finish
Monday, giving back some of the market's gains following a rare winning week.
The S&P 500 slipped 0.3% after shifting between small gains and losses
throughout the day. The Dow Jones Industrial Average slipped 0.2% and the
Nasdaq fell 0.7%. Shares in small companies rose, while more stocks rose than
fell on the New York Stock Exchange.
Declines in technology and communication stocks, and in several big
retailers and travel-related companies, weighed on the market. Those losses
checked gains in energy stocks and elsewhere.
The market's uneven finish comes after stocks closed out last week with
solid gains and the S&P 500 posted its best day in two years Friday. Stocks
rallied last week as pressure from rising Treasury yields let up somewhat and
investors speculated the Federal Reserve may not have to be as aggressive about
raising interest rates as earlier thought as it fights to control inflation.
Treasury yields rose again Monday. The rebound in stocks last week was
largely seen as a reaction to a wave of selling that some market strategists
say was perhaps overdone, leaving the market ripe for a rebound.
"There's quite a bit of noise going on as we get to quarter's end," said Tom
Hainlin, national investment strategist at U.S. Bank Wealth Management.
"So, it really wasn't surprising for us to see a bounce last week." On the
other hand, Hainlin said, "we would view that as not necessarily an indication
that fundamentally things have gotten better."
The S&P 500 fell 11.63 points to 3,900.11. The Dow dropped 62.42 points to
31,438.26, and the Nasdaq slid 83.07 points to 11,524.55.
Smaller company stocks bucked the broader market's decline. The Russell 2000
rose 6.01 points, or 0.3%, to 1,771.74.
European markets also ended mixed. Asian markets closed higher overnight.
Technology and communication stocks were among the biggest drag on the
market. Microsoft fell 1%, while Electronic Arts slid 3.5%.
Several big retailers and travel-related companies also fell. Amazon and
Carnival each fell 2.085%.
Those losses checked gains elsewhere in the market, including energy stocks,
which rose as the price of U.S. crude oil climbed 1.8%. Exxon Mobil rose 2.5%.
Robinhood Markets jumped 14% following a published report suggesting that
cryptocurrency exchange FTX is considering buying the popular trading app
company. In May, FTX CEO Samuel Bankman-Fried bought a 7.6% stake in Robinhood,
according to a filing with U.S. regulators.
Robinhood shot to fame for its easy-to-use trading app, which brought a new
generation of investors to the stock market, perhaps most famously with the
meme-stock frenzy that sent GameStop soaring early last year. Crypto has become
a major part of its business.
Treasury yields rose. The yield on the 10-year Treasury note, which helps
set mortgage rates, rose to 3.20% from 3.12% late Friday.
The market rally last week was welcome relief in the midst of a deep slump
for Wall Street as investors worry about the path of inflation and whether
rising interest rates will temper the impact to businesses and consumers or
push the economy into a recession.
The Federal Reserve and other central banks have been aggressively raising
interest rates in a sharp turnaround from maintaining ultra-low rates during
the virus pandemic that helped support the economy. It's a delicate balance for
the Fed, which hopes to cool off the economy, but not so much that it actually
contracts. Higher interest rates, though, also hurt prices for investors and
have prompted much of the year's sell-off.
Investors have favorably viewed recent reports showing weak consumer
sentiment and economic growth because that raises the possibility that the Fed
will ease off its plan for aggressive rate hikes as economic growth slows.
Wall Street will have a few more reports this week that could provide more
insight into inflation, economic growth and the Fed's path ahead.
On Tuesday, business group The Conference Board will release its consumer
confidence report for June. Spending and confidence held up well through most
of the post-pandemic recovery, even as inflation rose. But record high gas
prices and an overall tighter squeeze from inflation have been eating away at
wallets and prompting many to shift or cut back spending.
Part of push behind inflation's tighter squeeze was Russia's invasion of
Ukraine in February. That sent energy prices soaring. U.S. crude oil prices are
up more than 40% for the year. Prices for wheat and corn have also surged.
Conferring by video link with Ukrainian President Volodymyr Zelenskyy, Group
of Seven leaders were finalizing a deal to seek a price cap on Russian oil,
raise tariffs on Russian goods and impose other new sanctions.
Russia may have also defaulted on its foreign debt for the first time since
the 1917 Bolshevik Revolution, further alienating the country from the global
Investors will get another update on U.S. economic growth on Wednesday when
the Commerce Department releases a report on first-quarter gross domestic