- July 30, 2018
- Posted by: Trading
- Category: News
U.S. stocks were lower Monday, with the technology sector posting sharp losses for a third session as Facebook Inc. tumbled into bear territory following its disappointing earnings last week.
What are the main benchmarks doing?
The Dow Jones Industrial Average
fell 68 points, or 0.3%, to 25,380. The S&P 500
11 points, 0.4%, to 2,807. The tech-heavy Nasdaq Composite Index
shed 86 points, or 1.1%, to 7,60.
Technology stocks were by far the weakest performing sector of the day, down 1.7%. Among notable losers, Facebook
fell more than 4% into bear market territory. It has lost more than 20% from a recent peak hit on July 25. Separately, Google-parent Alphabet Inc.
With two days left in July, the three gauges are showing healthy gains for the month. The S&P is up 3.5% for the month to date, representing its largest such rise since January, while the Dow and Nasdaq are higher by 5% and 2%, respectively.
What’s driving the markets?
Investors have been shaking off some worries about global trade tensions this month, instead focusing on upbeat readings on second-quarter earnings.
But some internet-related companies tumbled last week after disappointing releases and weighed on the broad market, including Facebook Inc. and Twitter Inc. Apple Inc.’s report late Tuesday will be key this week.
What are strategists saying?
“Generally speaking we’re seeing earnings come through in spectacular fashion. The beats have been significant, just off the charts. And while we’re not the cheapest region, underlying fundamentals remain extremely strong in the U.S., which should continue to support us,” said Michael Mullaney, director of global market research at Boston Partners.
Despite that, Mullaney suggested that valuations for technology stocks had gotten overextended.
“The market is punishing companies that don’t beat on revenue or earnings, or which give a bad outlook. You need to win on all three to do well, and if you miss, like Facebook did, you get pummeled.”
Which stocks are in focus?
CBS Corp.’s stock
lost 4%, building on a sharp drop on Friday that came on news that the media company’s board would investigate allegations of personal misconduct by CEO Les Moonves. Some board members discussed over the weekend whether Moonves should step aside, after a New Yorker article late Friday reported that six women have come forward saying he sexually harassed them over a period spanning three decades.
MGM Resorts International’s stock
rose 0.8% after the casino operator said it would create a U.S. sports betting and online gaming joint venture with U.K. gambling company GVC Holdings PLC
The alliance is seen as taking advantage of the opportunities opened up by the recent U.S. Supreme Court ruling on sports betting.
What are other markets doing?
Which economic reports are in focus?
U.S. pending home sales rose 0.9% in June, the National Association of Realtors said Monday, a tick better than had been anticipated.
Check out: MarketWatch’s Economic Calendar
On the Federal Reserve front, policy makers are slated to begin a two-day meeting on Tuesday. Economists expect it won’t raise interest rates, but see it issuing a statement Wednesday making it clear that more rate increases are coming. Two more rate increases this year have been signaled, but the first isn’t expected until September.
Other central banks are holding meetings this week: The Bank of Japan is expected to adhere to its current monetary policy at its July 30-31 meeting, while the Bank of England is expected to lift interest rates on Thursday in only its second hike in a decade.
-—Victor Reklaitis contributed to this report
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