The Dow Jones Industrial Average and the S&P 500 booked their first positive close in six sessions Monday, with the blue-chip index scoring its best daily gain in about five weeks, according to Dow Jones Market Data.
The Nasdaq Composite ended 1% lower, extending its losing streak to a fourth session in a row.
What happened in stocks
The Dow Jones Industrial Average
rose 261.91 points, or 0.8%, to end at 34,869.63.
The S&P 500
gained 10.15 points, or 0.2%, closing at 4,468.73, but off its intraday high at 4,492.99.
The Nasdaq Composite Index
fell 9.91 points, or 0.1%, finishing at 15,105.58.
Last week, the Dow industrials dropped 2.2%, the S&P 500 lost 1.7% and the Nasdaq Composite retreated by 1.6%. For both the Dow and the S&P, it was the worst week since the period ending June 18; both indexes also fell for five straight sessions.
See: When the Fed finally steps back, can the U.S. stock and bond markets stand on their own legs?
What drove markets
The Dow and S&P 500 rose Monday, while the Nasdaq finished lower, with selling in healthcare, growth and value stocks weighing on equities.
“We are basically in a drifting market,” said Peter Cardillo, chief market economist at Spartan Capital Securities, pointing to modest gains Monday for the Dow and small-cap stocks, but pressure on the Nasdaq Composite.
“What we are seeing here is basically a market that’s very much gripped by seasonal factors,” Cardillo said, in a phone interview. “We have had four or five days of declines. But the decline has been without any major volumes. That’s a good sign, which means the market isn’t likely to encounter any serious decline during the month of September.”
There weren’t any major developments on the economic or corporate front, ahead of more fireworks on Tuesday, when consumer price data will be released and Apple Inc. AAPL,
will unveil its new suite of upgraded products.
Supply-chain worries, as well as the delta variant of coronavirus, were two factors behind last week’s stock-market retreat.
“Throughout the pandemic, vaccination has been key to both lifting social restrictions and local market performance,” wrote Seema Shah, chief strategist at Principal Global Investors, in a note.
“In the United States, where the S&P 500 is up more than 20% YTD, an early and aggressive vaccination rollout has allowed for the full reopening of its economy,” the strategist wrote.
Investors also have remained on edge as valuations have been perceived as lofty and due for a pullback.
Read: Risk of ‘hard’ stock-market valuation correction is growing, says Deutsche Bank—here’s why
An investor survey conducted by Deutsche Bank found more than two-thirds of respondents expecting at least a 5% decline in stocks by the end of the year. The same survey found the biggest risks to the market are new variants that bypass vaccines, and higher than expected inflation or bond yields.
“Everybody is bracing for a correction, and usually when everyone thinks the same way, the opposite usually happens,” Cardillo said. “That’s not to say it can’t happen in the next three or four months. But will it happen in the intermediate term? I don’t think so.”
In economic data, the U.S. federal budget deficit narrowed to $2.71 trillion in the first 11 months of the fiscal year, the Treasury Department said Monday. This is down $297 million or 10% from the $3 trillion deficit over the same period last year.
On the public health front, U.S. Surgeon General Dr. Vivek Murthy said President Joe Biden will announce new steps to slow the spread of the virus ahead of the U.N. General Assembly session that is scheduled to start on Tuesday, Reuters reported.
That report comes as the daily average of new cases in the U.S. over the past seven days eased to 145.724 as of Sunday, down from a recent peak of 166,105 on Sept. 1 and 7% less than what it was two weeks ago, according to a New York Times tracker.
The “main message of delta” isn’t that the economy has learned to adapt, but that we “still don’t know what’s coming,” Chief Economist Chris Low and his team at FHN Financial, wrote in a weekly note.
All it takes is to “talk to parents with school-age children in one of the cities where pediatric COVID cases are soaring,” to get a sense that confidence has been shaken and “fear is now back.”
Which companies were in focus
- Bausch Health Cos. Inc. BHC said Monday it has filed confidentially for the initial public offerings of its eye health business Bausch & Lomb, and its medical aesthetics business Global Solta. Shares gained 2.6%
- Coinbase Global Inc. COIN on Monday announced plans to raise $1.5 billion in debt through a private offering of senior notes due 2028 and 2031 through a 144A transaction. The exchange platform’s stock fell 2.2%.
- Marriott Vacations Worldwide Corp. VAC said it expects third-quarter contract sales to be at the lower end of its previously provided guidance range of $380 million to $410 million, as the vacation ownership company said the recent increase in COVID-19 cases and the wildfires around Lake Tahoe have led to “modestly elevated” cancellation rates. Its stock rose 4.7%.
- Store Capital Corp. STOR, a real-estate investment trust, or REIT, that invests in single tenant operational real estate, said Monday it is raising its quarterly cash dividend by 6.9% to 38.50 cents a share. Shares added 2.4%.
- Dick’s Sporting Goods Inc. DKS said Monday that it plans to add 10,000 seasonal workers this year, the most in the athletic retailer’s history. Shares fell 1.3%.
shares slumped after the Financial Times reported that Chinese regulators want to break up popular payments app Alipay. U.S. listed shares of Alibaba fell 1.6%.
Shares of Walmart Inc.
were in focus on Monday after the big box retailer said that a report claiming that it was accepting cryptocurrency litecoin
as payment was a fake. Shares fell 0.6%.
Also see: Litecoin spikes 20% after hoax reports that Walmart would accept the cryptocurrency
How did other assets fare?
The yield on the 10-year Treasury note TMUBMUSD10Y was down 1.7 basis points at around 1.323%. Yields and debt prices move in opposite directions.
The dollar edged up 0.1% Monday, as measured by the ICE U.S. Dollar Index DXY.
Gold futures rose, with the December contract GC00 settling up 0.1% at $1,794.40 an ounce.
Oil futures CL00 rose, with West Texas Intermediate crude advancing 1.1% to settle at $70.45 a barrel.
The Hang Seng HSI closed 1.5% lower to start the week. Elsewhere in Asia, the Shanghai Composite SHCOMP ticked up 0.3%, while Japan’s Nikkei 225 NIK edged up 0.2%.
European equities closed higher Monday, with the Stoxx Europe 600 SXXP rising 0.3% and the FTSE 100 UKX gaining 0.6%.
Steve Goldstein contributed reporting