Stocks fall on Wall Street, led by drops in technology
Stocks fell in afternoon trading on Wall Street Monday as markets turned cautious ahead of earnings reports from big U.S. companies and updates on how badly inflation is hitting American businesses and households.
The S&P; 500 fell 1% as of 12:01 p.m. Eastern. The Dow Jones Industrial Average fell 141 points, or 0.5%, to 31,197 and the Nasdaq fell 2%.
Twitter fell 8.9% after Elon Musk announced late Friday that he would abandon his $44 billion offer to buy the social media company, while Twitter said it would sue the billionaire to enforce his commitment to the purchase.
European markets fell as the shutdown of a major gas pipeline from Russia to Germany for annual maintenance brought concern Russia might not resume the flow of gas as scheduled.
The early slide for major indexes follows a week of gains in what has been a turbulent market for months. Overall, stocks are in a slump as investors try to track inflation’s impact on businesses and consumers and worry about a potential recession.
Wall Street will get some key updates this week on inflation. The U.S. government on Wednesday will release its June report on inflation’s impact on consumer prices and a report on Thursday about the impact on prices for businesses.
The latest round of corporate earnings ramps up this week with Delta Air Lines reporting their latest results on Wednesday. JPMorgan Chase will report results on Thursday, with Citigroup and Wells Fargo reporting on Friday.
The Federal Reserve has been aggressively raising interest rates to try and slow down economic growth and cool inflation. The key concern for Wall Street is whether the central bank hits the brakes too hard on economic growth and skids the economy into a recession. Those concerns have grown heavier as economic indicators point to an already slowing economy.
Inflation has only been worsened in 2022 by Russia’s invasion of Ukraine pushing energy prices higher. COVID-19 remains a concern and prompted lockdowns in China that hurt supply chains. The quickly changing coronavirus has spawned yet another super contagious omicron mutant that’s worrying scientists as it gains ground in India and pops up in numerous other countries, including the United States, Australia, Germany, the United Kingdom and Canada.
Companies that are viewed as less risky investments, such as utilities and household goods makers, held up better than the broader market.
Technology stocks were among the biggest weights on the market. Apple fell 1.3% and Google’s parent company shed 2.3%. Retailers and other companies that rely on direct consumer spending also fell broadly. Amazon slipped 2.6% and Expedia fell 4.4%.
Bond yields fell. The yield on the 10-year Treasury fell to 2.98% from 3.09% late Friday.