Stocks ended slightly lower on Wall Street on Monday after recovering much of an early decline. Tech stocks rebounded after leading the market lower in the morning. The losses of industrial companies and banks were partly offset by the gains of health care companies. The S&P 500 finished lower 0.1%, erasing most of a previous loss of just over 2%. The Nasdaq, heavily weighted by technology companies, closed less than 0.1%. It was down 2.7% earlier. Bond yields have continued to rise as investors anticipate measures by the Federal Reserve to raise interest rates. Energy prices have fallen.
THIS IS A CURRENT UPDATE. AP’s previous story follows below.
Stocks fell and bond yields rose on Monday, extending the market’s pullback last week, as investors shifted their positions anticipating that the Federal Reserve will raise interest rates this year in its attempt to lower the market. inflation.
There were plenty of sales, although in the late afternoon the indices broke their early-in-the-day lows. The S&P 500 was down 0.7% at 3:29 p.m. EST. The benchmark index was down 2% at the start. The Dow Jones Industrial Average fell 312 points, or 0.9%, to 35,914 and the Nasdaq fell 0.8%.
Tech stocks were again a big part of the decline. The sector was the biggest market weight until January and is coming out of its worst week since October 2020. Big tech stocks have a disproportionate influence on the S&P 500 due to their massive size. At the start of the year, the tech sector accounted for 29.2% of the S&P 500. Nvidia lost 1.1%.
Wall Street is watching the Federal Reserve closely for clues as to how quickly it may raise interest rates. The central bank has already announced that it will accelerate the reduction of its bond purchases, which have helped to keep interest rates low. The market is now evaluating the chances that the Fed will raise short-term rates by at least a quarter of a point in March to around 78%. A month ago it was around 36%.
Higher interest rates make stocks of expensive tech companies and other expensive growth companies less attractive to investors, which is why the sector has fallen as bond yields rise.
The 10-year Treasury yield rose to 1.77% from 1.76% on Friday night.
Healthcare was the only sector in the S&P 500 to post a gain. Sectors considered less risky, including utilities and housewares manufacturers, held up better than the rest of the market.
Elsewhere in the market, a mix of trade news and financial updates has moved several important stocks.
Take-Two Interactive, maker of “Grand Theft Auto,” plunged 14.9% after announcing a deal to buy Zynga, which makes “Words With Friends” and “Farmville.” Zynga jumped 41.2%.
Sportswear maker Lululemon Athletica fell 2.3% after warning investors that an increase in virus cases had hurt its fourth quarter financial results. Medicines maker and distributor Cardinal Health fell 6.1% after saying supply chain issues would hurt profits in its medical segment.
Investors have a busy week of economic reports and corporate earnings.
On Wednesday, the Ministry of Labor will release an update on the impact of inflation on prices with its Consumer Price Index for December. The agency will release details of the impact of inflation on businesses on Thursday with its producer price index for December.
On Friday, Citigroup, JPMorgan Chase and Wells Fargo will release their latest quarterly financial results.
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