U.S. stocks were lower Monday, with the technology sector posting sharp losses for a third session as Facebook Inc. tumbled into bear territory following its disappointing earnings last week.
What are the main benchmarks doing?The Dow Jones Industrial Average DJIA, -0.25% fell 65 points, or 0.3%, to 25,383. The S&P 500 SPX, -0.32% dropped 10 points, 0.4%, to 2,809. The tech-heavy Nasdaq Composite Index COMP, -1.07% shed 88 points, or 1.1%, to 7,649. All three benchmarks were in the red but well off session lows.
Technology stocks were by far the weakest performing sector of the day, down 1.6%. Among notable losers, Facebook FB, -3.75% fell about 4%, with that move pushing shares into bear market territory. It has lost more than 20% from a recent peak hit on July 25. Separately, Google-parent Alphabet Inc. GOOG, -1.08% GOOGL, -1.34% dropped nearly 2%.
With two trading sessions left in July, the three gauges are showing healthy gains for the month. The S&P is up 3.2% for the month to date, representing its largest such rise since January, while the Dow and Nasdaq are higher by 4.5% and 1.7%, respectively.
Read: The fate of the stock market for 2018 could rest on the next couple of days
What’s driving the markets?Investors have been shaking off some worries about global trade tensions this month, instead focusing on upbeat readings on second-quarter earnings.
But some internet-related companies tumbled last week after disappointing releases and weighed on the broad market, including Facebook and Twitter Inc. Apple Inc.’s report late Tuesday will be key this week.
Check out: Earnings Watch—Even Apple takes a back seat to Elon Musk right now
What are strategists saying?“Generally speaking we’re seeing earnings come through in spectacular fashion. The beats have been significant, just off the charts. And while we’re not the cheapest region, underlying fundamentals remain extremely strong in the U.S., which should continue to support us,” said Michael Mullaney, director of global market research at Boston Partners.
Despite that, Mullaney suggested that valuations for technology stocks had gotten overextended.
“The market is punishing companies that don’t beat on revenue or earnings, or which give a bad outlook. You need to win on all three to do well, and if you miss, like Facebook did, you get pummeled.”
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Which stocks are in focus?Caterpillar Inc. CAT, +0.53% rose 0.6% after the Dow component reported second-quarter earnings that beat expectations and raised its full-year outlook.
Tyson Foods Inc. TSN, -7.17% sank 7% after it gave a cautious full-year earnings outlook, citing uncertain trade policies and higher tariffs.
First Data Corp. FDC, +1.90% gained 2.1% after it reported second-quarter earnings and revenue that topped expectations.
Juniper Networks Inc. JNPR, +0.48% rose 0.6% after Deutsche Bank upgraded the stock to buy and raised its price target to $32 from $25.
U.S. Foods Holding Corp. USFD, -16.60% tumbled 17% after it agreed to buy Services Group of America’s five operating companies for $1.8 billion in cash.
Fossil Group Inc. FOSL, +2.45% has entered into a licensing agreement with Bayerische Motoren Werke Aktiengesellschaft for BMW-branded watches and smartwatches through 2023. Shares rose 1.7%.
CBS Corp.’s stock CBS, -5.30% lost 5.1%, following a sharp drop on Friday on news that the media company’s board would investigate allegations of personal misconduct by CEO Les Moonves. Some board members discussed over the weekend whether Moonves should step aside, after a New Yorker article late Friday reported that six women have come forward saying he sexually harassed them over a period spanning three decades.
What are other markets doing?European stocks SXXP, -0.30% were down across the board, while Asian markets closed with losses.
Oil futures CLU8, +2.21% were gaining, as gold futures GCQ8, -0.07% logged its third straight loss and the ICE U.S. Dollar Index DXY, -0.41% stumbled.
Which economic reports are in focus?U.S. pending home sales rose 0.9% in June, the National Association of Realtors said Monday, a tick better than had been anticipated.
Check out: MarketWatch’s Economic Calendar
On the Federal Reserve front, policy makers are slated to begin a two-day meeting on Tuesday. Economists expect it won’t raise interest rates, but see it issuing a statement Wednesday making it clear that more rate increases are coming. Two more rate increases this year have been signaled, but the first isn’t expected until September.
Other central banks are holding meetings this week: The Bank of Japan is expected to adhere to its current monetary policy at its July 30-31 meeting, while the Bank of England is expected to lift interest rates on Thursday in only its second hike in a decade.
Don’t miss: Why investors will be keeping close watch on the Bank of Japan
-—Victor Reklaitis contributed to this article
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