US STOCKS-S&P 500, Dow subdued on virus woes, slowing economy

“Usually the market needs to take a breather after recording so many new highs in a traditionally ho-hum month.” Seven of the 11 S&P sectors were trading higher by early afternoon, led by information technology and consumer discretionary, which had led Wall Street's recovery to record highs following a coronavirus-driven crash last year.


Reuters | Washington DC | Updated: 02-08-2021 23:45 IST | Created: 02-08-2021 23:39 IST
US STOCKS-S&P 500, Dow subdued on virus woes, slowing economy
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The S&P 500 and Dow erased early gains on Monday as worries about the Delta variant of the coronavirus and a slowing U.S. economy overshadowed optimism around more fiscal stimulus and a strong second-quarter earnings season.

Data earlier in the day showed that although U.S. manufacturing grew in July, its pace slowed for a second straight month as spending rotated back to services from goods, and shortages of raw materials persisted. The softer-than-expected data also sent U.S. bond yields to their lowest since July 20 and knocked the blue-chip Dow off an intra-day record high hit in early trading.

"There have been 13 times since World War Two that the S&P recorded six or more new highs in July. And in those 13 times, the market fell 12 times in the following August," said Sam Stovall, chief investment strategist at CFRA Research. "Usually the market needs to take a breather after recording so many new highs in a traditionally ho-hum month."

Seven of the 11 S&P sectors were trading higher by early afternoon, led by information technology and consumer discretionary, which had led Wall Street's recovery to record highs following a coronavirus-driven crash last year. The utilities sector - considered a defensive play - was also among the biggest gainers. The energy index fell 0.1%, tracking a 4% slump in oil prices.

By 2:06 p.m. ET, the Dow Jones Industrial Average rose 7.98 points, or 0.02%, to 34,943.45, the S&P 500 gained 3.41 points, or 0.08%, to 4,398.67 and the Nasdaq Composite added 56.34 points, or 0.38%, to 14,729.01. Square Inc, the payments firm of Twitter Inc co-founder Jack Dorsey, jumped 11% after it said it would purchase Australian buy now, pay later pioneer Afterpay Ltd for $29 billion.

With manufacturing activity data coming in weaker than expected, investor focus now turns to services sector data on Wednesday and the Labor Department's monthly jobs report on Friday. After mixed quarterly reports from technology behemoths last week, all eyes this week are on earnings from companies including Eli Lilly and Co, CVS Health Corp and General Motors Co.

Advancing issues outnumbered declining ones on the NYSE by a 1.43-to-1 ratio; on Nasdaq, a 1.39-to-1 ratio favored advancers. The S&P 500 posted 74 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 94 new highs and 51 new lows.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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