Markets closed mostly lower on Monday as worries about a deluge of earnings made investors feel shaky. Also, growing geopolitical tensions and concerns of slowing global growth coupled with a decline in shares of major banks dented investors’ confidence. This saw both the S&P 500 and Dow closing in the red. However, the Nasdaq snapped its three-day losing streak, led by a rally in tech stocks.
The Dow Jones Industrial Average (DJI) slid 0.5% to close at 25,317.41. The S&P 500 declined 0.4% to close at 2,755.88. The Nasdaq Composite Index closed at 7,468.63, declining 0.3%. A total of 6.9 billion shares were traded on Monday, higher than the last 20-session average of 7.8 billion shares. Decliners outnumbered advancers on the NYSE by a 1.50-to-1 ratio. On Nasdaq, a 1.34-to-1 ratio favored declining issues.
How did the Benchmark Perform?
The Dow shed 126.93 points, as investors grew cautious ahead of a slew of earnings reports this week. Also, bank stocks declined broadly, led by The Goldman Sachs Group, Inc. (GS – Free Report) . Shares of Goldman Sachs lost 2.4%.
The S&P 500 gave up 11.90 points, as energy and financials weighed heavy on markets. The Financial Select Sector SPDR (XLF) declined 2.1%, while the Energy Select Sector SPDR (XLE) lost 1.1%. Shares of Bank of America Corporation (BAC – Free Report) declined 3.3%. Also, the S&P 500 marked its fourth straight day of losses.
However, tech stocks somewhat limited losses on the S&P 500 and also boosted the Nasdaq. The tech-heavy Nasdaq added 19.60 points, led by a rally in tech stocks. Shares of Apple, Inc. (AAPL – Free Report) and Amazon.com, Inc. (AMZN – Free Report) gained 0.6% and 1.4%, respectively. Apple has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Bank Stocks Decline, Upcoming Earnings Make Investors Shaky
On Monday, shares of major banks nosedived. Shares of both Bank of America and Citigroup Inc. (C – Free Report) declined more than 3%, while JPMorgan Chase & Co. (JPM – Free Report) lost 1.4%. Shares of banks fell primarily because of growing worries of higher mortgage rates, which could cap loan growth.
Markets have been suffering for the last couple of weeks on concerns of rapidly rising interest rates, and concerns about the state of the global economy. That has been dampening investor sentiment, thus taking a toll on stocks.
Moreover, on Monday, caution grew ahead of a deluge of earnings reports this week, which include Dow members Caterpillar, Inc. (CAT – Free Report) , United Technologies Corporation (UTX – Free Report) and 3M Company MMM, along with tech giants Amazon and Alphabet, Inc. (GOOGL – Free Report) .
Geopolitical Tensions Weigh on Markets
Rising geopolitical tensions have been rattling markets for a while. Last weekend, a Saudi official came up with a new account of the death of journalist Jamal Khashoggi, which differs from the official statement provided by Saudi Arabia earlier. Khashoggi’s death has led to widespread criticism against Saudia Arabia, with Treasury Secretary Steven Mnuchin announcing that he has decided to pull out of an investment conference in Riyadh. Foreign investors have reportedly dumped more than $1 billion worth of Saudi stocks last week.
However, earlier on Monday, U.S. stocks rallied following a surge in China stocks. Last week, China said that its economy slowed in the July-September quarter, growing 6.5%, down from 6.7% registered in the previous quarter. Investors have been worrying that if China experiences further problems, the pain could spread to other emerging economies and eventually to the United States.
Stocks That Made Headlines
Valero and Valero Energy Partners Ink $950M Merger Deal
Valero Energy Corporation (VLO – Free Report) announced that it is merging with Valero Energy Partners LP (VLP) and Forest Merger Sub LLC, a subsidiary that was incorporated in Delaware as a merge vehicle by the company. (Read More)
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