Stocks Close Slightly Lower Monday 10/14 16:00
Stocks capped a wobbly day of trading on Wall Street with modest losses
Monday, a shaky start to the week for the market after its first weekly gain in
(AP) -- Stocks capped a wobbly day of trading on Wall Street with modest
losses Monday, a shaky start to the week for the market after its first weekly
gain in a month.
Losses in consumer goods makers, utilities and technology stocks helped
outweigh gains in banks and real estate companies. A 2% drop in crude oil
prices also hurt energy stocks.
Trading was choppy for much of the day after falling in the early going. The
muted trading wiped out some of the gains from a rally on Friday, when
investors welcomed signs of progress in the latest round of trade negotiations
between the U.S. and China.
Washington and Beijing agreed to a truce, with the U.S. holding off on
tariffs set to kick in this week and China agreeing to buy more farm goods. But
the U.S. has yet to cancel plans for more tariffs in December and the nations
still have several complicated issues to negotiate, which may have dimmed some
of the optimism about a broader trade deal.
"We kind of peeled back the layers and said, 'Hey, was this really a
significant trade deal, or was it just a little bit of window dressing to make
everybody feel like there was actually a trade deal?'" said Karyn Cavanaugh,
senior markets strategist at Voya Investment Management. "The market is
The S&P 500 index slipped 4.12 points, or 0.1%, to 2,966.15. The Dow Jones
Industrial Average dropped 29.23 points, or 0.1%, to 26,787.36. The Nasdaq gave
up 8.39 points, or 0.1%, to 8,048.65.
Small-company stocks did worse than the rest of the market. The Russell 2000
index lost 6.47 points, or 0.4%, to 1,505.43.
Bond markets and the U.S. government were closed for the Columbus Day
Stocks opened broadly lower Monday, but trading soon turned choppy, leaving
the market veering between small gains and losses the rest of the day.
The modest pullback followed last week's market rally, when investors
applauded the progress made by the U.S. and China following two days of
The U.S. agreed to suspend a planned hike in tariffs on $250 billion of
Chinese goods that had been set to kick in Tuesday. Beijing, meanwhile, agreed
to buy $40 billion to $50 billion in U.S. farm products.
The truce was a result of the 13th round of negotiations between the nations
since the trade war began well over a year ago.
But the key sticking points of intellectual property and trade secrets still
hang over the dispute. And the overall picture hasn't changed for companies,
which are still holding off on forecasts and investments because of the
uncertain trade situation.
"There is not yet a viable path to existing tariffs declining and tariff
escalation remains a meaningful risk," Michael D. Zezas, a Morgan Stanley
strategist, wrote in a note to clients. "Thus, we do not expect a meaningful
rebound in corporate behavior that would drive global growth expectations
In a research note sizing up Friday's partial trade deal announcement,
J.P.Morgan analysts noted that while the talks have delivered a tentative truce
between the two nations, the gap between that truce and peace "could be large,
and U.S.-China tension could escalate again, especially into the election
Benchmark crude oil fell $1.11 to settle at $53.59 a barrel. Brent crude
oil, the international standard, dropped $1.16 to close at $59.35 a barrel.
Investors are looking ahead to the start of the third-quarter earnings
season, with companies beginning to report results over the next few weeks.
Several major banks are due to issue their latest quarterly financial
results this week. JPMorgan Chase, Citigroup and Wells Fargo will all report
results on Tuesday. Bank of America and PNC Financial will report results on
Investors will be watching for information on income from loans as banks
contend with sinking bond yields. Falling yields force banks to set lower rates
on mortgages and other kinds of loans.
Expectations for S&P 500 companies' third-quarter results are generally low,
with analysts forecasting a drop of 4.2% from a year ago. The results, plus
what CEOs say about their spending and revenue forecasts, should give a better
picture of the economy's potential direction.
"The market is a little bit nervous about earnings because there are some
estimates out there that say there's going to be negative growth," Cavanaugh
said, noting she expects overall earnings for the July-September quarter to
show growth from a year ago.
Wholesale gasoline fell 3 cents to $1.61 per gallon on Monday. Heating oil
declined 4 cents to $1.92 per gallon. Natural gas rose 7 cents to $2.28 per
1,000 cubic feet.
Gold rose $9.00 to $1,491.70 per ounce, silver rose 17 cents to $17.63 per
ounce and copper was unchanged at $2.62 per pound.
The dollar fell to 108.37 Japanese yen from 108.52 yen on Friday. The euro
weakened to $1.1031 from $1.1041.
European markets closed lower.