US stocks were weaker in early afternoon trading on Monday as investors weighed the prospect of the Federal Reserve raising interest rates as soon as September, after Friday's strong jobs report. The declines follow three straight weeks of losses, with the Dow and S&P touching their lowest in a month. The stronger-than-expected jobs data for May and a pickup in wages were the latest signs of improved momentum in the economy, prompting expectations of a rate hike sooner rather than later.
-- Apple down; biggest drag on Nasdaq, S&P
-- Airline stocks fall on comments from Qatar Airways
While the Fed is expected to raise rates this year, the timing of the move has kept the market on the edge. Most economists expect a rate hike in September, followed by another one before the end of the year, according to a Reuters poll. "Complacency, apathy and uncertainty are all among terms that may appropriately describe investor sentiment right now," said Terry Sandven, chief equity strategist at US Bank Wealth Management in Minneapolis.
"Volatility is apt to increase in July and August as the market moves through the historical dog days of summer, waits for the second-quarter results and, importantly, transitions to a likely Fed move in September." No major economic data was scheduled to be released on Monday, following a string of releases last week that ended with the monthly jobs report on Friday.
The dollar retreated after a report - later denied - that President Barack Obama had expressed concern over its strength after a year-long rally. At 12:41 pm ET (1641 GMT) the Dow Jones industrial average was down 41.61 points, or 0.23 percent, at 17,807.85, the S&P 500 was down 7.06 points, or 0.34 percent, at 2,085.77 and the Nasdaq Composite was down 29.84 points, or 0.59 percent, at 5,038.62. Eight of the 10 major S&P sectors were lower, with the technology index's 1.2 percent drop leading the losses.
Dow component Apple fell 1 percent to $127.33 just before the company was set to unveil a new music service at its annual gathering of developers. The stock weighed the most on the Nasdaq Composite and the S&P 500 indexes. Airlines stocks fell 4.2 percent, with JetBlue slumping 6.1 percent, after Qatar Airways asked the industry's largest trade group to reiterate its support of liberal air travel. Tesla rose 3.2 percent to $257.02 after plans for its Gigafactory got a boost from Panasonic's move to start sending its employees to the plant, with manufacturing expected to begin next year.
Sears Holdings' shares fell 2.7 percent to $39.63 after the company reported a sharp drop in quarterly sales. Declining issues outnumbered the advancers on the NYSE by 1,903 to 1,041, for a 1.83-to-1 ratio on the downside. On the Nasdaq, 1,586 issues fell and 1,081 advanced for a 1.47-to-1 ratio favouring decliners. The S&P 500 index showed eight new 52-week highs and seven new lows, while the Nasdaq recorded 112 new highs and 18 new lows.
Comments
Comments are closed.