The Dow Jones Industrial Average eked out a minuscule gain in choppy trading Monday, while the S&P 500 and Nasdaq Composite indexes each closed lower as investors digested a batch of quarterly results and turned their focus to this week’s consumer-price index reading.
The Dow Jones Industrial Average DJIA, +0.00% finished higher by just 1.39 points at 35,091.13. It has finished up five of the past seven trading days, according to Dow Jones Market Data.
The S&P 500 SPX, -0.37% finished down by 16.66 points, or 0.4%, at 4,483.87. The index is off by 6.5% from its record close of 4,796.56 on Jan. 3.
The Nasdaq Composite Index COMP, -0.58% closed lower by 82.34 points, or 0.6%, at 14,015.67. It is off 12.7% from its record close of 16,057.44 on Nov. 19, 2021.
What drove markets?
Major stock indexes switched between modest gains and losses during the New York session, as investors continued to digest the implications of the surprisingly strong 467,000 gain in nonfarm payrolls in January and looked toward Thursday’s consumer-price index report for January. The median forecast for the report is for a 7.2% headline, year-over-year gain.
“Right now, this market is just focused on one thing: inflation,” said Ed Moya, a senior market analyst for the Americas at OANDA Corp. “We saw some readjustment of portfolios — with tech stocks being one example,” he said via phone.
According to RBC Capital Markets, 47% of the S&P 500 companies that have reported so far have seen their share prices fall 1% or more in the one-day trading session immediately post results, though that is better than the 63% that saw negative movements after earnings two weeks ago.
“The resiliency of earnings remains a comforting data point and supports the idea that we’ve seen the lows in the stock market for the time being,” said Lori Calvasina, head of U.S. equity strategy at RBC.
Among some of the other factors weighing on stock investors Monday were a recent policy pivot by the European Central Bank and moves in the U.S. government-debt market.
“Equity markets are still in the process of digesting Friday’s surprisingly strong employment report and last week’s ECB policy shift, but traders have one eye on fixed income markets,” Michael Reinking, a senior market strategist for the New York Stock Exchange, said in an email to MarketWatch. “The next big catalysts are the 10- and 30-year Treasury auctions later this week and CPI on Thursday, so in the meantime, I’m watching for some compression of the recent range.”
Which companies were in focus?
Frontier Group Holdings Inc. ULCC, +3.47% agreed to buy Spirit Airlines Inc. SAVE, +17.17% in a deal valued at $6.6 billion that unites two of the country’s largest low-fare carriers. Shares of Frontier finished up 3.5%, while those for Spirit closed over 17% higher.
Peloton Interactive PTON, +20.93% shares closed up by 21%. The stationary-bike maker is said to be drawing interest from potential suitors, The Wall Street Journal reported, citing people familiar with the matter.
Shares of Hasbro Inc. HAS, -0.98% were in focus after the toy maker raised its dividend and its quarterly profit beat expectations. Its stock finished down by 1%.
Spotify Technology SPOT, -1.67% was in focus again after Chief Executive Daniel Ek apologized for the backlash that has followed the emergence of Joe Rogan’s use of a racial slur in previous podcast episodes. Shares closed lower by 1.7%.
How did other assets fare?
The yield on the 10-year Treasury note TMUBMUSD10Y, 1.920% declined 1.5 basis points to 1.915%, not far from its highest rate since December 2019.
The dollar was down by less than 0.1% as measured by the ICE U.S. Dollar Index DXY, -0.08%, a measure of the buck against a half-dozen currencies.
West Texas Intermediate crude for March delivery CLH22, -0.74% fell 99 cents, or 1.1%, to settle at $91.32 a barrel on the New York Mercantile Exchange.
April gold GCJ22 rose $14, or 0.8%, to settle at $1,821.80 an ounce.
In European equities, the Stoxx Europe 600 SXXP, +0.68% closed up by 0.7%, while London’s FTSE 100 UKX, +0.76% finished 0.8% higher.
China’s CSI 300 XX:000300 and the Shanghai Composite CN:SHCOMP ended higher by 1.5% and 2%, respectively. Meanwhile, the Hang Seng Index HSI, +0.03% in Hong Kong finished marginally up and Japan’s Nikkei 225 NIK, -0.70% closed 0.7% lower.
— Mark DeCambre contributed to this article