Following the lackluster performance seen last Friday, stocks continued to show a lack of direction over the course of the trading session on Monday. The major averages once again spent the day bouncing back and forth across the unchanged line.
The major averages eventually ended the day mixed. While the Nasdaq fell 35.25 points or 0.3 percent to 12,037.20, the S&P 500 inched up 3.52 points or 0.1 percent to 4,137.04 and the Dow rose 66.44 points or 0.2 percent to 33,875.40.
The choppy trading on Wall Street came as traders remained reluctant to make significant moves ahead of the release of earnings news from several big name companies in the coming days.
Tech giants Alphabet (GOOGL), Amazon (AMZN), Intel (INTC), Meta Platforms (META) and Microsoft (MSFT) are among a slew of well-known companies due to report their quarterly results this week.
“America’s S&P 500 has added $2.4 trillion in market capitalization so far in 2023 and just six stocks – Meta Platforms, Amazon, Apple, Netflix, Google’s parent Alphabet and Microsoft has provided $1.6 trillion of that gain between them, or two-thirds of the total,” says AJ Bell investment director Russ Mould.
He added, “After a lukewarm set of figures from Netflix last week, and a sharp year-on-year drop in first-quarter profits from another tech darling, Tesla, investors will be looking to five of the MAANAM sextet (or FAANGM group as they once were) to deliver good results and upbeat outlooks and help U.S. equity markets maintain the run that began last October.”
A lack of major U.S. economic data also kept some traders on the sidelines ahead of the release of several key reports.
Reports on consumer confidence, new home sales, durable goods orders, first quarter GDP and personal income and spending are likely to attract attention in the coming days.
The personal income and spending report includes a reading on inflation said to be preferred by the Federal Reserve and could impact the outlook for interest rates ahead of the Fed meeting next week.
Despite the lackluster performance by the broader markets, oil service stocks moved sharply higher, driving the Philadelphia Oil Service Index up by 2.4 percent.
The rally by oil service stocks came amid a notable increase by the price of crude oil, with crude for June delivery climbing $0.89 to $78.76 a barrel.
Oil producer, gold and natural gas stocks also moved to the upside along with the price of their associated commodities.
On the other hand, software and computer hardware stocks came under pressure, weighing on the tech-heavy Nasdaq.
Reflecting the weakness in the sectors, the Dow Jones U.S. Software Index and the NYSE Arca Computer Hardware Index both fell by 1.1 percent.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. While Japan’s Nikkei 225 Index bucked the downtrend and inched up by 0.1 percent, China’s Shanghai Composite Index slid by 0.8 percent and Hong Kong’s Hang Seng Index fell by 0.6 percent.
Meanwhile, the major European markets finished the day little changed. While the German DAX Index edged down by 0.1 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index closed just below the unchanged line.
In the bond market, treasuries climbed firmly into positive territory over the course of the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 5.5 basis points to 3.515 percent.
Trading on Tuesday may be impacted by reaction to the latest earnings news, with 3M (MMM), Biogen (BIIB), Dow (DOW), General Electric (GE), General Motors (GM), McDonald’s (MCD), PepsiCo (PEP) and UPS (UPS) among the companies releasing their quarterly results before the start of trading.
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