By Chuck Mikolajczak
NEW YORK (Reuters) – U.S. stocks fell on Monday as early momentum from a strong retail sales report gave way to a rise in Treasury yields and concerns about rising tensions in the Middle East.
Following their biggest one-day percentage drop since Jan. 31 in the previous session, stocks opened higher in part after data showed retail sales rose more than expected in March.
Also providing early support were gains in some financial stocks after their quarterly results, as Goldman Sachs gained 3.1% after its first-quarter earnings beat Wall Street estimates, boosted by a recovery in underwriting, deals and bond trading that lifted its earnings per share to the highest since late 2021.
M&T Bank (NYSE:) jumped 4.6% after forecasting better-than-expected annual net interest income (NII), while the brokerage Carlos Schwab (NYSE:) advanced 2.2% despite reporting a drop in quarterly earnings. The stocks were the three best performers in the S&P 500 financial sector.
But gains faded on concerns that hostilities in the Middle East could continue to flare, and Treasury yields rose, with the benchmark 10-year U.S. Treasury bond hitting its highest level since November.
“You saw a little bit of a bounce this morning because maybe people thought, 'Okay, it sold on Friday' in anticipation of something really bad happening in the Middle East,” said Ken Polcari, managing partner at Kace Capital Advisors in Boca Mouse. Florida.
“All the geopolitical issues are going to cause tension and anxiety in the market, the realization that rates are not going to go down anytime soon has to finally hit home, that's what the bond market is telling you, that the rates are going to go up.” “.
It fell 229.73 points, or 0.61%, to 37,752.95, the S&P 500 lost 55.54 points, or 1.08%, to 5,067.88 and lost 260.93 points, or 1.61%, to 15,914.16.
Israel faced growing pressure from its allies to show restraint and avoid an escalation of the conflict in the Middle East as it considered how to respond to Iran's missile and drone attack over the weekend.
Each of the 11 major S&P sectors fell, with the rate-sensitive real estate and utilities sectors falling more than 1 percent.
stocks have struggled recently, with the S&P 500 suffering two straight weeks of declines and last week its biggest weekly percentage drop since October, as investors have pushed back expectations about the timing and size of any rate cuts by part of the Federal Reserve.
Apple (NASDAQ fell 2.1% as one of the biggest drags on the S&P 500 after data from research firm IDC showed the company's smartphone shipments fell about 10% in the first quarter of 2024.
Tesla (NASDAQ fell 4.9% after the electric vehicle maker said it would lay off more than 10% of its global workforce, according to an internal memo seen by Reuters.
Salesforce (NYSE:) fell 6.9% after Reuters reported, citing a source, that the customer relations software maker was in advanced talks to acquire Informatica.
Declining issues outnumbered rising ones by a ratio of 4.5 to 1 on the New York Stock Exchange and 3.28 to 1 on the Nasdaq.
The New York Stock Exchange recorded 34 new 52-week highs and 112 new lows, while the Nasdaq recorded 32 new highs and 295 new lows.
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