Most US stocks fall, but tech gains nudge Wall Street higher
Most U.S. stocks edged lower on Monday, but strength for several big tech companies nudged indexes a bit further into record heights. The S&P; 500 added 0.2% after bouncing between small gains and losses through the morning. The index is coming off its best week since February as optimism builds about the strengthening economy and expectations that the Federal Reserve will keep interest rates low for a while longer. Facebook was among the tech winners, gaining 4.2% after a federal judge dismissed antitrust lawsuits brought against it by the Federal Trade Commission and a coalition of state attorneys general.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
NEW YORK (AP) — Most U.S. stocks are edging lower on Monday, but strength for several big tech companies is nevertheless nudging indexes a bit further into record heights.
The S&P; 500 was 0.1% higher in afternoon trading after bouncing between small gains and losses through the morning. It’s coming off an all-time high set on Friday as optimism builds about the strengthening economy and expectations that the Federal Reserve will keep interest rates low for a while longer.
The Dow Jones Industrial Average fell, down 168 points, or 0.5%, at 24,266, as of 2:35 p.m. Eastern time. But strength for Apple, Nvidia and other stocks that have been winners of the increasingly online world helped nudge the Nasdaq composite further into record heights. It was 0.7% higher.
Trading was relatively quiet around the world, with European stocks modestly lower and several Asian indexes nearly unchanged.
The action was more notable in the bond market, where the yield on the 10-year Treasury slumped to 1.47% from 1.53% late Friday. It was as high as 1.70% last month, but it’s been receding as worries about high inflation have calmed a bit.
The drop in long-term rates can crimp the profits banks make from lending money, and financial stocks were the biggest drag on the S&P; 500. Wells Fargo slipped 1.5%, and Capital One Financial fell 2.3%.
But falling Treasury yields can also make the high price tags for high-growth stocks easier to justify, and gains for tech stocks almost singlehandedly nudged the S&P; 500 higher.
Apple rose 1.3%, Microsoft gained 1.1% and Intel climbed 2.9%. Nvidia jumped 5.1% after The Sunday Times in Britain reported several big customers of U.K. semiconductor company Arm came out in support of its proposed takeover by Nvidia.
Still, worries remain on Wall Street, and a measure of nervousness in the stock market ticked 3% higher.
Some measures of the economy may have already hit their peaks after roaring out of the recession caused by the pandemic. Inflation also remains a worry, even if more investors have come around to the Federal Reserve’s view that it will be only a temporary problem.
Much of the choppiness in the markets is a result of the speed at which the economy has bounced back from its pandemic slump.
“When you come out of it rapidly it starts to raise concerns for investors, but I would remind them that we are still early in a cycle,” said Brian Levitt, global market strategist at Invesco. “I would expect this to play out over time.”
The next major turning point for the market could come on Friday, when the U.S. government gives the latest monthly update on how many jobs the economy is creating and what wages are doing.
Economists expect the report to show that employers added 685,000 more jobs than they cut in June. That would be an acceleration following a couple months of disappointingly slow hiring.
They also expect the report to show that average hourly earnings jumped 3.5% in June from a year earlier.
A sharp rise in wages would be an even bigger worry about inflation for markets than the recent jump in commodity prices. Oil, lumber and other commodities have shown this year that they can quickly shoot higher in price, but they can also come down nearly as quickly.
Higher wages for workers, meanwhile, tend to be more durable. If inflation does end up being more than the “transitory” problem that the Fed and many investors seem to believe, that could force the Fed to be more aggressive about raising interest rates quickly and upset markets.
Crude oil prices slipped 1.6% Monday, but the cost of a U.S. barrel is still up 50% for the year. That’s contributed to gasoline prices that are about 90 cents higher than this time last year.