Benchmarks settled in the red on Monday as investors refrained
from placing big bets ahead of the second-quarter earnings season.
The blue-chip index and the S&P 500 snapped their three-day
record rally on Monday. The Nasdaq ended in the red zone, dragged
down by declines in bio-tech and Internet stocks.
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The Dow Jones Industrial Average (DJI) declined almost 0.3% to
close Monday's trading session at 17,024.21. The Standard &
Poor 500 (S&P 500) dropped 0.4% to finish at 1,977.65. The
tech-laden Nasdaq Composite Index closed at 4,451.53; declining
0.8%. The fear-gauge CBOE Volatility Index (VIX) surged 9.8% to
settle at 11.33. Total volume for the day was roughly 4.81 billion
shares, lower than last month's average of 5.80 billion. Decliners
outpaced advancing stocks on the NYSE. For 67% stocks that
declined, 30% advanced.
The S&P 500 and the blue-chip index retreated from Thursday's
record close after investors refrained from betting ahead of the
start of the second-quarter earnings season. The Dow had closed
above the 17,000 mark for the first time on Thursday. This helped
the blue-chip index end at a record level for the fourteenth time
this year. The S&P 500 also ended at another high on Thursday;
the twenty-fifth one for the year.
Earnings season is expected to kick off this week. On Tuesday,
aluminum producer Alcoa Inc. (NYSE:
) will declare quarterly earnings results. Among other major
releases, Wells Fargo & Company (NYSE:
) is expected to release earnings numbers on Friday. The following
week, heavy-weights such as JPMorgan Chase & Co. (NYSE:
), The Goldman Sachs Group, Inc. (NYSE:
), Intel Corporation (NASDAQ:
) and Google Inc. (NASDAQ:
) are expected to post quarterly earnings results. According to
FactSet Research Systems Inc. (NYSE:
), earnings for the S&P 500 are expected to rise 4.9% this
The Nasdaq ended in negative territory largely due to Internet
stocks. Shares of Internet television network provider Netflix,
), online travel company TripAdvisor Inc. (NASDAQ:
) and Internet radio service provider Pandora Media, Inc. (NYSE:
) decreased 2.5%, 1.6% and 5.8%, respectively.
Internet stocks from the Technology sector such as Google Inc.
), Groupon, Inc. (NASDAQ:
), Yelp, Inc. (NYSE:
), LinkedIn Corporation (NYSE:
), Yahoo! Inc. (NASDAQ:
), FireEye, Inc. (NASDAQ:
) and Facebook, Inc. (NASDAQ:
) declined 0.4%, 3.3%, 3.9%, 2.6%, 1.7%, 6.0% and 1.5%,
Bio-tech stocks too dragged the Nasdaq down. Shares of bio-tech
companies such as Gilead Sciences Inc. (NASDAQ:
), Vertex Pharmaceuticals Incorporated (NASDAQ:
) Amgen Inc. (NASDAQ:
), Biogen Idec Inc. (NASDAQ:
) and Celgene Corporation (NASDAQ:
) decreased 0.8%, 1.9%, 2.2%, 1.7% and 1.5%, respectively.
Airline stocks incurred losses on Monday. Shares of U.S. airline
companies such as Delta Air Lines Inc. (NYSE:
), United Continental Holdings, Inc. (NYSE:
) and American Airlines Group Inc. (NASDAQ:
) declined 4.4%, 3.2%, and 3.7%, respectively. The decline in
shares of airline stocks had a negative impact on the industrial
sector. The Industrial Select Sector SPDR (XLI) declined 0.7%.
Small-cap stocks also posted losses on Monday. The Russell 2000
Index of small-cap stocks underperformed other benchmarks. The
index declined 1.8%, its biggest drop since April 25.
Seven out of 10 sectors of the S&P 500 ended in the red. The
SPDR S&P Homebuilders (XHB) declined 1.6%, the highest among
the S&P 500 sectors. Key housing stocks from the sector such as
DR Horton Inc. (NYSE:
), Toll Brothers Inc. (NYSE:
), PulteGroup, Inc. (NYSE:
), Lennar Corp. (NYSE:
) and KB Home (NYSE:
) decreased 1.9%, 2.1%, 1.6%, 2.0% and 2.6%, respectively.
The Materials Select Sector SPDR (XLB) declined 0.8%, the second
biggest among the S&P 500 sectors. Key stocks from the
Materials sector such as E. I. du Pont de Nemours and Company
), The Dow Chemical Company (NYSE:
), Monsanto Company (NYSE:
), LyondellBasell Industries NV (NYSE:
) and Praxair Inc. (NYSE:
) dropped 0.2%, 1.6%, 1.0%, 1.3% and 0.2%, respectively.
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