By Dow Jones Business News,
July 07, 2014, 05:00:00 PM EDT
By Anora Mahmudova and Carla Mozee, MarketWatch
NEW YORK (MarketWatch) -- The U.S. stock market on Monday gave up some of last week's gains that sent the Dow Jones
Industrial Average above 17,000 for the first time.
Investors took a step back to reassess Thursday's stronger-than-expected jobs report while awaiting second-quarter
earnings that start trickling in this week.
The S&P 500 (SPX) closed 7.8 points, or 0.4%, lower at 1,977.65, with only the defensive sectors, such as utilities,
telecoms and consumer staples, ending with modest gains.
The Dow Jones Industrial Average (DJI) fell 44.05 points, or 0.3%, to 17,024.21. The Nasdaq Composite (RIXF) was
dragged down by losses in biotech and Internet companies, ending the day down 34.4 points, or 0.8%, to 4,451.53.
The Russell 2000 (RUT) underperformed other benchmarks, falling 21.41 points, or 1.8%, to 1,186.44.
Read the recap of MarketWatch's live blog of today's stock-market action.
Kristina Hooper, U.S. investment strategist at Allianz Global Investors, said investors overreacted to last week's
jobs data, as it's likely that inflation, not a stronger economy, will be what pushes the Fed to raise interest rates.
"Investors are digesting and rereading the jobs report, hence we are saying markets pausing after record levels.
Still, we think markets are too liberal in expecting rate hikes in the second half of 2015 and will be surprised if it
happens sooner," she said.
The new earnings season begins Tuesday with results from aluminum producer Alcoa Inc. ( AA ) after the bell. Another
highlight is Wells Fargo & Co. ( WFC ) on Friday.
Earnings for the S&P 500 are expected to rise by 4.9% for the quarter, according to FactSet, and with stock prices
extending their reach to new highs, investors are likely to be less forgiving if companies miss Wall Street's
expectations. Analysts have reduced their earnings estimates by the lowest amount since the second quarter of 2011, said
John Butters, senior earnings analyst at FactSet.
Among individual companies, American Apparel Inc. ( APP ) rallied 1.7% after The Wall Street Journal reported the
retailer is in talks to raise new financing following the ouster of CEO Dov Charney.
Apple Inc.( AAPL ) rose 2.1% on big gains in June sales ahead of a busy fall season. For more stock movers, read Movers
and Shakers column.
In the commodities market, oil futures settled lower, with the U.S. oil benchmark (CLQ4) slipping below $104 a barrel
Gold futures(GCQ4) settled at their lowest level in more than a week, extending losses from the previous session.
Asian stocks closed mostly lower, with Japan's Nikkei Average down 0.4%, and European stocks fell after an unexpected
and steep drop in German industrial production raises worries about growth.
The dollar (DXY) extended gains into a fourth consecutive day, with traders considering whether the U.S. jobs report
for June adds more pressure on the Fed to raise interest rates sooner than later.
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