Wall Street closed on a mixed note on Monday, led by industrials and energy stocks. Investors remained cautious about interpreting the robust jobs report from Friday and eagerly await the inflation numbers due later this week. Two of the three major indexes ended in the green, while one remained flat.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.3% or 101.23 points to close at 33,586.52. Nineteen components of the 30-stock index ended in positive territory, while 11 ended in negative.
The S&P 500 added 0.1% or 4.09 points to close at 4,109.11. Six of the 11 broad sectors of the benchmark index ended in positive territory. The Industrials Select Sector SPDR (XLI), the Energy Select Sector SPDR (XLE) and the Real Estate Select Sector SPDR (XLRE) gained 0.9%, 0.8% and 0.5%, respectively, while the Communication Services Select Sector SPDR (XLC) lost 0.2%.
The tech-heavy Nasdaq remained virtually flat to finish at 12,084.36.
The fear-gauge CBOE Volatility Index (VIX) was up 3.1% to 18.97. A total of 9.1 billion shares were traded on Monday, lower than the last 20-session average of 12.3 billion. Advancers outnumbered decliners on the NYSE by a 1.63-to-1 ratio. On Nasdaq, a 1.39-to-1 ratio favored advancing issues.
Investors Weary of Robust Jobs Report
The jobs report released on Friday interprets into a resilient economy amid moderate inflation. A tight labor market is drawing more people into the workforce. Although annual wage gains slowed from the previous reportage, it remained too high to be consistent with the U.S. central bank's 2% inflation target. This has made investors apprehensive that the Fed might revert to hiking interest rates in its May meeting and not follow up on its rate-pause signal.
Market participants are currently pricing in at least a 25 bps rate hike from the next Fed meeting, following the employment numbers, as they are concerned that the Fed might interpret the report as proof of the fact that the tight monetary policy regime is yet to take effect. This, in turn, further stoked recession fears and growth and tech stocks suffered.
Tech Stocks Struggle on Recession Fear
The tech-heavy Nasdaq closed the session marginally down because of a tech rout. When a recession looms large on an economy, and investors are unsure whether a central bank will be able to attain a soft-landing, high-value growth stocks like tech stocks suffer. Monday was no exception.
Consequently, shares of Alphabet Inc. (GOOGL - Free Report) and Apple Inc. (AAPL - Free Report) lost 1.8% and 1.6%, respectively. Apple carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Energy Sector Drives Market Even As Oil Prices Fall
Oil prices settled lower on Monday, after rising for three straight weeks, on fear of further interest rate hikes. Brent crude settled down $0.96, or 0.2%, at $84.58/barrel, while WTI crude also fell $0.94, or 0.1%, to $79.74/barrel.
However, expecting the United States’ own stockpile to decrease, especially after the OPEC+ announced production cuts, and considering the fact that demand in emerging markets continues to be strong, energy stocks did well, carrying the day’s trade with them.
Economic Data
The U.S. Census Bureau reported on Monday that total inventories of merchant wholesalers were $919.2 billion in February, up 0.1% from the revised January level. The January number was revised to a 0.6% decrease from the earlier reported 0.4% decrease.
Where Will Stocks Go…
If Biden Wins? If Trump Wins?
The answers may surprise you.
Since 1950, even after negative midterm years, the market has never had a lower presidential election year. With voters energized and engaged, the market has been almost unrelentingly bullish no matter which party wins!
Now is the time to download Zacks' free Special Report with 5 stocks that offer extreme upside for both Democrats and Republicans…
1. Medical manufacturer has gained +11,000% in the last 15 years.
2. Rental company is absolutely crushing its sector.
3. Energy powerhouse plans to grow its already large dividend by 25%.
4. Aerospace and defense standout just landed a potentially $80 billion contract.
5. Giant Chipmaker is building huge plants in the U.S.
Hurry, Download Special Report FREE >>
Wall Street closed on a mixed note on Monday, led by industrials and energy stocks. Investors remained cautious about interpreting the robust jobs report from Friday and eagerly await the inflation numbers due later this week. Two of the three major indexes ended in the green, while one remained flat.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.3% or 101.23 points to close at 33,586.52. Nineteen components of the 30-stock index ended in positive territory, while 11 ended in negative.
The S&P 500 added 0.1% or 4.09 points to close at 4,109.11. Six of the 11 broad sectors of the benchmark index ended in positive territory. The Industrials Select Sector SPDR (XLI), the Energy Select Sector SPDR (XLE) and the Real Estate Select Sector SPDR (XLRE) gained 0.9%, 0.8% and 0.5%, respectively, while the Communication Services Select Sector SPDR (XLC) lost 0.2%.
The tech-heavy Nasdaq remained virtually flat to finish at 12,084.36.
The fear-gauge CBOE Volatility Index (VIX) was up 3.1% to 18.97. A total of 9.1 billion shares were traded on Monday, lower than the last 20-session average of 12.3 billion. Advancers outnumbered decliners on the NYSE by a 1.63-to-1 ratio. On Nasdaq, a 1.39-to-1 ratio favored advancing issues.
Investors Weary of Robust Jobs Report
The jobs report released on Friday interprets into a resilient economy amid moderate inflation. A tight labor market is drawing more people into the workforce. Although annual wage gains slowed from the previous reportage, it remained too high to be consistent with the U.S. central bank's 2% inflation target. This has made investors apprehensive that the Fed might revert to hiking interest rates in its May meeting and not follow up on its rate-pause signal.
Market participants are currently pricing in at least a 25 bps rate hike from the next Fed meeting, following the employment numbers, as they are concerned that the Fed might interpret the report as proof of the fact that the tight monetary policy regime is yet to take effect. This, in turn, further stoked recession fears and growth and tech stocks suffered.
Tech Stocks Struggle on Recession Fear
The tech-heavy Nasdaq closed the session marginally down because of a tech rout. When a recession looms large on an economy, and investors are unsure whether a central bank will be able to attain a soft-landing, high-value growth stocks like tech stocks suffer. Monday was no exception.
Consequently, shares of Alphabet Inc. (GOOGL - Free Report) and Apple Inc. (AAPL - Free Report) lost 1.8% and 1.6%, respectively. Apple carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Energy Sector Drives Market Even As Oil Prices Fall
Oil prices settled lower on Monday, after rising for three straight weeks, on fear of further interest rate hikes. Brent crude settled down $0.96, or 0.2%, at $84.58/barrel, while WTI crude also fell $0.94, or 0.1%, to $79.74/barrel.
However, expecting the United States’ own stockpile to decrease, especially after the OPEC+ announced production cuts, and considering the fact that demand in emerging markets continues to be strong, energy stocks did well, carrying the day’s trade with them.
Economic Data
The U.S. Census Bureau reported on Monday that total inventories of merchant wholesalers were $919.2 billion in February, up 0.1% from the revised January level. The January number was revised to a 0.6% decrease from the earlier reported 0.4% decrease.
Where Will Stocks Go…
If Biden Wins? If Trump Wins?
The answers may surprise you.
Since 1950, even after negative midterm years, the market has never had a lower presidential election year. With voters energized and engaged, the market has been almost unrelentingly bullish no matter which party wins!
Now is the time to download Zacks' free Special Report with 5 stocks that offer extreme upside for both Democrats and Republicans…
1. Medical manufacturer has gained +11,000% in the last 15 years.
2. Rental company is absolutely crushing its sector.
3. Energy powerhouse plans to grow its already large dividend by 25%.
4. Aerospace and defense standout just landed a potentially $80 billion contract.
5. Giant Chipmaker is building huge plants in the U.S.
Hurry, Download Special Report FREE >>
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