Wall Street closed slightly lower in a choppy session on Monday as oil prices slid. Economic data showed that U.S. factory activity contracted in July to its lowest level since August 2020 because of reduced global demand. All the three major stock indexes ended in the red, ending a three-day winning streak.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) lost 0.1% or 46.73 points to close at 32,798.4. Seventeen components of the 30-stock index ended in red, while 12 ended in green and one remained unchanged.
The tech-heavy Nasdaq Composite finished at 12,368.98, dropping 0.2% or 21.71 points.
The S&P 500 fell 0.3% or 11.68 points to end at 4,118.61. Seven out of the 11 broad sectors of the index closed in the red. The Energy Select Sector SPDR (XLE), the Real Estate Select Sector SPDR (XLRE) and the Financials Select Sector SPDR (XLF) lost 2.1%, 0.9% and 0.8%, respectively, while the Consumer Staples Select Sector SPDR (XLP) went up by 1.3%.
The fear-gauge CBOE Volatility Index (VIX) was up 7.1% to 22.84. A total of 10.3 billion shares were traded Monday, lower than the last 20-session average of 10.8 billion. Advancers outnumbered decliners on the NYSE by a 1.17-to-1 ratio. On Nasdaq, a 1.07-to-1 ratio favored declining issues.
Energy Sector Weighs Heavy on Markets
Crude prices plunged on Monday as weak manufacturing data from several countries clouded the demand outlook. Investors eagerly await this week's meeting of OPEC and its producer partners to get a better hang of the supply side of things, as it has remained a burning issue for the last few months amid the Ukraine war. Brent and WTI have both closed out July with a second straight monthly loss for the first time since 2020. On Monday, Brent crude futures lost $3.94, or 3.8%, to settle at $100.03/barrel, having hit a session low of $99.09/barrel. WTI crude dropped $4.73, or 4.8% to end at $93.89/barrel, after hitting a low of $92.42.
Consequently, shares of Diamondback Energy, Inc. (FANG - Free Report) and Devon Energy Corporation (DVN - Free Report) lost 1.6% and 2%, respectively. Both carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
U.S. Factory Activity Falls in July But Exceeds Expectation
U.S. manufacturing activity slowed in July, but came in better than expected. There were signs that supply constraints are easing, with input prices for factories falling to a two-year low, suggesting that inflation has already peaked. The Institute for Supply Management (ISM) reading suggested that the economy was not in recession despite the second consecutive quarterly decline in U.S. gross domestic product. However, excess inventories remain a dead-weight problem with many businesses that have ordered too many goods because of worries about shortages.
The ISM Manufacturing Index for July came in at 52.8, better than the consensus of 52.2 for the period, and marginally lower than the June figure of 53. The July reading is the lowest since June 2020, when the economy was coming out of a pandemic slump. Four major manufacturing industries — petroleum and coal products, computer and electronic products, transportation equipment and machinery, all reported decent growth last month.
Economic Data
The U.S. Census Bureau reported that Construction Spending for June 2022 came in at a seasonally adjusted annual rate of $1,762.3 billion, 1.1% below the revised May estimate of $1,781.9 billion. The June figure is 8.3% above the June 2021 estimate of $1,628.0 billion. During the first six months of this year, construction spending amounted to $848.2 billion, 10.7% above the $766.0 billion for the same period in 2021.
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Wall Street closed slightly lower in a choppy session on Monday as oil prices slid. Economic data showed that U.S. factory activity contracted in July to its lowest level since August 2020 because of reduced global demand. All the three major stock indexes ended in the red, ending a three-day winning streak.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) lost 0.1% or 46.73 points to close at 32,798.4. Seventeen components of the 30-stock index ended in red, while 12 ended in green and one remained unchanged.
The tech-heavy Nasdaq Composite finished at 12,368.98, dropping 0.2% or 21.71 points.
The S&P 500 fell 0.3% or 11.68 points to end at 4,118.61. Seven out of the 11 broad sectors of the index closed in the red. The Energy Select Sector SPDR (XLE), the Real Estate Select Sector SPDR (XLRE) and the Financials Select Sector SPDR (XLF) lost 2.1%, 0.9% and 0.8%, respectively, while the Consumer Staples Select Sector SPDR (XLP) went up by 1.3%.
The fear-gauge CBOE Volatility Index (VIX) was up 7.1% to 22.84. A total of 10.3 billion shares were traded Monday, lower than the last 20-session average of 10.8 billion. Advancers outnumbered decliners on the NYSE by a 1.17-to-1 ratio. On Nasdaq, a 1.07-to-1 ratio favored declining issues.
Energy Sector Weighs Heavy on Markets
Crude prices plunged on Monday as weak manufacturing data from several countries clouded the demand outlook. Investors eagerly await this week's meeting of OPEC and its producer partners to get a better hang of the supply side of things, as it has remained a burning issue for the last few months amid the Ukraine war. Brent and WTI have both closed out July with a second straight monthly loss for the first time since 2020. On Monday, Brent crude futures lost $3.94, or 3.8%, to settle at $100.03/barrel, having hit a session low of $99.09/barrel. WTI crude dropped $4.73, or 4.8% to end at $93.89/barrel, after hitting a low of $92.42.
Consequently, shares of Diamondback Energy, Inc. (FANG - Free Report) and Devon Energy Corporation (DVN - Free Report) lost 1.6% and 2%, respectively. Both carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
U.S. Factory Activity Falls in July But Exceeds Expectation
U.S. manufacturing activity slowed in July, but came in better than expected. There were signs that supply constraints are easing, with input prices for factories falling to a two-year low, suggesting that inflation has already peaked. The Institute for Supply Management (ISM) reading suggested that the economy was not in recession despite the second consecutive quarterly decline in U.S. gross domestic product. However, excess inventories remain a dead-weight problem with many businesses that have ordered too many goods because of worries about shortages.
The ISM Manufacturing Index for July came in at 52.8, better than the consensus of 52.2 for the period, and marginally lower than the June figure of 53. The July reading is the lowest since June 2020, when the economy was coming out of a pandemic slump. Four major manufacturing industries — petroleum and coal products, computer and electronic products, transportation equipment and machinery, all reported decent growth last month.
Economic Data
The U.S. Census Bureau reported that Construction Spending for June 2022 came in at a seasonally adjusted annual rate of $1,762.3 billion, 1.1% below the revised May estimate of $1,781.9 billion. The June figure is 8.3% above the June 2021 estimate of $1,628.0 billion. During the first six months of this year, construction spending amounted to $848.2 billion, 10.7% above the $766.0 billion for the same period in 2021.
Free Report Reveals How You Could Profit from the Growing Electric Vehicle Industry
Globally, electric car sales continue their remarkable growth even after breaking records in 2021. High gas prices have fueled his demand, but so has evolving EV comfort, features and technology. So, the fervor for EVs will be around long after gas prices normalize. Not only are manufacturers seeing record-high profits, but producers of EV-related technology are raking in the dough as well. Do you know how to cash in? If not, we have the perfect report for you – and it’s FREE! Today, don't miss your chance to download Zacks' top 5 stocks for the electric vehicle revolution at no cost and with no obligation.
>>Send me my free report on the top 5 EV stocks<<
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