Stocks closed broadly lower on Wall Street Monday, pulling major indexes below the latest record highs they reached last week. The S&P 500 fell 0.5% and the tech-heavy Nasdaq lost 1%. Small-company stocks did worse than the rest of the market. Technology stocks had some of the biggest pullbacks, but the losses were shared broadly by a mix of banks, energy companies and others that depend on spending by consumers. Investors are turning their focus to company earnings reports, and looking to see if the upbeat forecasts for strong results hold true. Treasury yields rose.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Stocks were broadly lower in afternoon trading on Monday, easing off of their latest record highs from last week.
Investors are shifting their focus now to company earnings, as the busiest time for quarterly results will be this week and next.
The S&P 500 index was down 0.7% as of 3:32 p.m. Eastern. The Dow Jones Industrial Average was down 175 points, or 0.5% to 34,024 and the Nasdaq fell 1.2%.
Technology stocks were the biggest weight on the market, but the losses were shared broadly by a mix of banks, energy companies and others that rely on direct consumer spending. Chipmaker Intel fell 2.3%, Capital One fell 1% and Valero Energy fell 2.8%.
Tesla dropped 3.7% after two people were killed in Texas in a crash of one of its models. Authorities say there was no one in the driver’s seat at the time of the crash. It’s not clear whether the car’s driver-assist system was being used.
Smaller company stocks also fell. The Russell 2000 index was down 1.4%.
Earnings are front and center this week, as investors look to justify the recent rise in stock prices with the profits needed to keep the market fueled in this recovery. On average analysts are expecting profits across the S&P 500 to be up 24% from a year earlier, according to FactSet.
Eighty-one out of the 500 members of the S&P 500 will report this week, as well as 10 out the 30 members of the Dow, including Johnson & Johnson, Verizon Communications and Intel.
“Investors want to see validation of this very sharp positive economic momentum that is starting to get priced in,” Sunitha Thomas, national portfolio advisor at Northern Trust Wealth Management. “They want to see that earnings momentum is really there for the rest of the year.”
Coca-Cola added 0.1% after beating Wall Street’s first-quarter profit forecasts and giving investors an encouraging update on improving sales. Harley-Davidson jumped 9.7% after handily beating analysts’ profit forecasts.
The bond market was relatively stable. The yield on the 10-year Treasury note rose to 1.59% from 1.57% late Friday. Outside of earnings, a good amount of investor attention is focused on the bond market as government stimulus and the recovering economy have led to concerns about inflation.
Peloton slid 7.4% after regulators issued a safety notice over the exercise equipment company’s new treadmill. The company hasn’t been forced to recall the treadmill, and it’s fighting the issue.