Monday is expected to be quiet on Wall Street amid the Columbus Day holiday.
Angela Weiss/AFP via Getty Images
The U.S. stock market turned lower in afternoon trading on Monday, as as higher oil prices and bond yields weighed on stocks.
By midafternoon, the Dow Jones Industrial Average was down 114 points, 0r 0.3%. The S&P 500 fell 0.3% and the Nasdaq Composite declined 0.2%. All three indexes swung back and forth between losses and gains throughout the day.
Brent crude oil, the international benchmark, rose 1.8% to more than $83 a barrel, with WTI crude oil up 2.1% to more than $81 a barrel. Oil had been up as much as 3% earlier in the day. Natural gas prices initially popped, before falling more than 2%.
Higher oil and gas prices could be costly for some companies, but could also reduce consumer demand. Meanwhile, they could prompt the Federal Reserve to hike interest rates earlier than anticipated in order to stop inflation.
Also, global bond yields were rising on Monday. The U.K. 10-year Gilt’s yield rose to 1.19% from 1.16% Friday, though the yield fell from its intraday high. The German 10-year Bund saw its yield pop to negative 0.12% from negative 0.148%. While the U.S. bond market is closed for Columbus day, these jumps in yields could signify U.S. Treasury yields are bound to pop this week.
Yields have been spiking since September, and stocks remain below their all-time highs. The S&P 500 is still down more than 2.5% from its record high, hit on Sept. 2, as higher bond yields make future profits less valuable.
Investors will closely watch the wave of coming corporate earnings for the impact of rising energy prices and supply-chain complications, but the first major groups to release results are the big banks.
Bank of America (ticker: BAC), Citigroup (C), Wells Fargo (WFC), Morgan Stanley (MS), and Goldman Sachs (GS) all report this week, and analysts noted that their outlooks for 2022 are likely to be more influential for stocks than the economic data releases on the calendar.
In other corporate news, Merck (MRK) formally submitted a request to the Food and Drug Administration for emergency use authorization of its Covid-19 pill, which reduces hospitalization risk. This means the pill could be approved in just weeks. Merck shares rose in premarket trading before dropping 0.7% during regular hours.
Overseas, Tokyo’s Nikkei 225 rose 1.6% as investor sentiment was buoyed by comments from the new prime minister, Fumio Kishida, that he isn’t considering changes to Japanese capital-gains tax. The pan-European Stoxx 600 ended a tad higher.
Here are 8 stocks on the move Monday:.
Zoom Video Communications (ZM) stock rose 0.6% even after getting a price target cut to $300 from $350 at Stifel.
Comcast (CMCSA) stock dropped 3% after getting downgraded to Market Perform from Outperform at Raymond James.
Emerson Electric (EMR) stock fell 1.6% as the company plans to merge its software business with Aspen Technology (AZPN) in an $11 billion cash and stock deal.
Alibaba (9988.H.K.) stock rose 7.9% in Hong Kong, with Alibaba
‘s (BABA) U.S.-listed shares up 2.1%. It rallied along with other Chinese tech stocks in Hong Kong, as Tencent (0700.H.K.) lifted 3%, Meituan (3690.H.K.) surged 8.4%, Baidu (BIDU) rose 6.4%, and JD.com (JD) increased 5.4%.
Write to Jacob Sonenshine at jacob.sonenshine@barrons.com
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