The Dow Jones Industrial Average snapped a 5-session win steak Monday, falling late in the session after pushing above the 35,000 milestone, with the broader market came under pressure as high-profile Big Tech shares tumbled.
What did major indexes do?
fell 34.94 points, or 0.1%, to close at 34,742.82, after reaching an intraday peak at 35,091.56.
The S&P 500
shed 44.17 points, or 1%, ending at 4,188.43.
The Nasdaq Composite
tumbled 350.38 points, or 2.6%, to finish at 13,401.86.
On Friday, stocks shook off a much-weaker-than-expected April jobs report Friday, with the Dow and S&P 500 both ending at records, while the Nasdaq Composite outpaced its major benchmark peers but still posted a weekly loss.
What drove the market?
Stocks tumbled late Monday, leaving the S&P 500 and Nasdaq Composite with their worst daily losses since March 18, as investors weigh how much of the economic recovery already has been priced into stocks.
“Our point of view is that there are a lot of stocks that are extremely stretched in terms of valuations,” said Sandi Bragar, managing director at Aspiriant, a wealth management firm.
Bragar’s not worried about the pace of the economic recovery or a pullback of central bank’s monetary support this year, but she is worried that with “yields on bonds so low and stocks so high,” that financial markets could be poised for a lot more volatility, “which we haven’t seen that much of this year.”
Friday’s disappointing April jobs report, which saw U.S. nonfarm payrolls rise by 266,000 versus a consensus forecast for an increase of 1 million, had initially been characterized as providing a positive backdrop for equities.
“In our view, the jobs report shows a surprising pause in the labor market recovery, coming at a time when the underlying fundamentals and alternative data are pointed towards acceleration,” wrote analysts at Credit Suisse, in a note.
“Nevertheless, this report should delay any discussion of withdrawing accommodation until a decisive labor market rebound takes place,” they said. “As such, we continue to expect positive equity returns, but at the expense of increased near-term volatility.”
Investors were tracking developments around a cyberattack on a vital pipeline that delivers around 45% of fuel consumed on the East Coast. Alpharetta, Ga.-based Colonial Pipeline over the weekend said it closed the conduit after it was the target of a cyberattack. On Monday, Colonial said it was aiming to “substantially” restore operations by the end of the week.
were up fractionally in recent action. Analysts said pump prices may avert a rise if operations are restored within a few days. Oil futures also close fractionally higher, amid lingering concerns that the incident could chill near-term demand for crude.
Tech and other growth-oriented stocks, which are expected to grow earnings faster than their peers, were buoyed Friday as the jobs data sparked a retreat for Treasury yields. But those shares significantly underperformed on Monday, with some of the largest tech companies suffering significant losses.
Meanwhile, a strong earnings season was moving into its final stage.
Through Friday, 88% of S&P 500 companies had reported earnings covering the first quarter, according to FactSet. The index is now reporting the highest year-over-year growth in earnings since for the first quarter since 2010, said John Butters, senior earnings analyst at FactSet, in a note.
Analysts also expect double-digit earnings growth for the remaining three quarters of 2021. These above-average growth rates are due to a combination of higher earnings for 2021 and an easier comparison to unusually weak earnings in 2020 due to the negative impact of COVID-19 on numerous industries, Butters said.
Which companies were in focus?
Trade Desk Inc.
shares tumbled 26% Monday, after the provider of advertising buying services reported better-than-expected first-quarter profit and revenue and announced a 10-for-1 stock split.
Share of Chipotle Mexican Grill Inc.
shed 2.4% after the company outlined wide ranging compensation incentives, including boosting hourly crew member wages to $11 to $18 per hour.
American depositary receipts for BioNTech SE
jumped 10.2% after the German biotechnology group, which co-developed the first COVID-19 vaccine to win regulatory approval with Pfizer Inc.
on Monday reported a surge in revenues.
U.S. Foods Holding Corp.
reported earnings and revenue that topped forecasts and said it wouldn’t provide guidance due to pandemic-related uncertainty. Shares fell 2.7%.
Shares of Energizer Holdings Inc.
were flat after the battery maker delivered results that blew past Wall Street forecasts.
Marriott International Inc.
shares lost 4.1% after the hotel operator announced earnings that beat estimates but revenue that fell short.
Shares of Tyson Foods Inc.
were flat after the protein manufacturer reported fiscal second-quarter earnings and sales that beat expectations.
What did other markets do?
The ICE U.S. Dollar Index
a measure of the currency against a basket of six major rivals, was virtually unchanged.
Oil futures closed at a modest gain, with the U.S. benchmark settling at $64.92 a barrel. Gold futures
closed slightly higher, up 0.3% to settle at $1,837.60 an ounce.
The pan-European Stoxx Europe 600
closed up 0.1%, while London’s FTSE 100
gave up 0.1%. In Asia, Hong Kong’s Hang Seng Index
fell 0.1%, while Japan’s Nikkei 225
rose 0.5% and the Shanghai Composite
Crypto assets were in focus, with parody coin dogecoin
dropping sharply following the airing of a heavily hyped episode of “Saturday Night Live” guest-hosted by Tesla CEO Elon Musk. Ether
coins that run on the Ethereum blockchain, however, were 10.8% higher, after trading near records above $4,000.