U.S. stocks retreated Monday morning, setting up the S&P 500 to break its longest string of daily gains in about 1 ½ years, ahead of a the start of first-quarter earnings season.
How are the benchmarks faring?
The Dow Jones Industrial Average DJIA, -0.39% was off 124 points, or 0.5%, at 26,301, the S&P 500 index SPX, -0.15% was down 7 points at 2,886, a decline of 0.2%, while the Nasdaq Composite Index COMP, -0.15% lost 26 points, or 0.3%, at 7,912.
What’s driving the market?
Markets have been buoyant on the back of U.S.-Chinese trade developments but with investors still awaiting a concrete meeting between President Donald Trump and his counterpart in China, Xi Jinping, the rally in equities that has taken the three main benchmarks close to records has cooled.
On Friday, the March employment report showed that the U.S. economy added 196,000 new jobs, above consensus expectations of 177,000 in a MarketWatch poll of economists. The Labor Department’s official measure of unemployment held steady at 3.8%. The data alleviated some worries that U.S. economic growth was rapidly slowing in tandem with increasing signs of contraction elsewhere in the world.
Indeed, the Bank of Japan cut its economic assessment for three of the countries nine regions, according to the Japan Times.
Market watchers say at least some of the headwinds investors were confronting were pegged to concerns about weakness in coming first-quarter results. A number of companies, including Dow-component Walgreens Boots Alliance Inc. WBA, +0.64% have dialed back earnings outlooks for 2019.
Read: How the worst earnings season in years could trip up the stock market
In Europe, market participants were watching the latest development surrounding Britain’s attempt to extricate itself from the European Union. Brussels was set to decide on an extension to the so-called Brexit deadline, perhaps setting a date at the end of the year or even in 2020.
U.S. factory orders fell 0.5% in February, steeper than the 0.4% decline forecast by economists in a MarketWatch poll. The data show that growth in the manufacturing continues to expand but manufacturers are becoming more cautious.
What are strategists saying?
Craig Callahan, president of Icon funds told MarketWatch that Monday’s weakness was largely the result of consolidating recent gains.“There are many skeptics of this bull market, and so when the market goes up a bit as it did last week, they take the opportunity to get out,” he said.
“An interruption of the bull run is being caused by earnings anxieties, as investors await the flow of [first-quarter] reports,” wrote Peter Cardillo, chief market economist at Spartan Capital Securities, in a daily research note.
Which stocks are in focus?
Shares of Boeing Co. BA, -3.94% were in focus after the aeronautics and defense contractor announced that it was scaling back production of its 737 MAX 8 aircraft, which have been grounded after a pair of fatal plane crashes within in six months of each other. Shares fell 3.9% Monday.
Shares of General Electric Co. GE, -6.47% fell 6.7%, after analyst Stephen Tusa at J.P. Morgan returned to a bearish stance on the company, lowering his price target to $5 from $6, or 50% below Friday’s closing price.
Warren Buffett said that the next CEO of embattled bank Wells Fargo & Co. WFC, +0.26% shouldn’t come from Wall Street. Buffett is one of the biggest shareholders in Wells Fargo via Berkshire Hathaway BRK.A, +0.19% BRK.B, -0.08%
Pinterest PINS, +0.00% set a price range for its coming initial public offering at between $15 and $17 dollar. The online-imaging company is slated to go public next week on the New York Stock Exchange.
Read: Pinterest’s IPO filing — 5 things investors should know
Shares of Zillow Group Inc. ZG, +3.38% rose 3% Monday morning, after analysts at Cowen upgraded the stock to outperform.
How did the major indexes perform last week?
On Friday, the S&P 500 index climbed 13.35 points, or 0.5%, to 2,892.74, rising for the seventh straight session, its longest streak since October of 2017. The Dow Jones Industrial Average advanced 40.36 points, or 0.2%, to 26,424.99 and the Nasdaq Composite Index rose 46.91 points, or 0.6%, to 7,938.69.
For the week, the S&P 500 gained 2.1%, the blue-chip index added 1.9% and the tech-heavy Nasdaq rallied 2.7%.
How are other markets trading?
Stocks in Asia traded mixed Monday, with Japan’s Nikkei 225 NIK, -0.21% losing 0.2%, while Hong Kong’s Hang Seng Index HSI, +0.47% added 0.5% and China’s Shanghai Composite Index SHCOMP, -0.05% edged 0.1% lower.
European markets traded mostly lower, as Germany’s Dax DAX, -0.41% fell, while the FTSE 100 UKX, +0.04% rose and the Stoxx Europe 600 SXXP, -0.22% index edged lower.
In commodities markets, crude oil CLK9, +1.89% was on the rise, along with the price of gold GCM9, +0.68% The U.S. dollar DXY, -0.36% edged lower against a basket of its peers.
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