US stocks lose ground, still headed for big monthly gains
Stocks are broadly lower on Wall Street in afternoon trading Monday, a modest step back for the major indexes in an otherwise banner October for the market.
The S&P 500 fell 0.6% as of 1:28 p.m. Eastern. The benchmark index is on pace for an 8.2% monthly gain, its first since July following two straight monthly losses.
The Dow Jones Industrial Average fell 61 points, or 0.2%, to 32,808 and is on track for its biggest monthly gain since at least 1987.
The Nasdaq fell 0.7% and is also headed for its first monthly gain since July.
Technology and communications stocks were the biggest drags on the broader market Monday. Apple fell 1.1% and Google’s parent fell 1.3%.
Stocks have been gaining ground throughout October as investors shifted their focus to the latest round of corporate earnings. More than half of the companies within the S&P 500 have reported results and shown overall earnings growth of 2.3%, according to FactSet.
Companies have so far given investors a mixed bag of results and forecasts as Wall Street tries to get a better picture of the economy. Inflation remains stubbornly hot and the Federal Reserve has been raising interest rates aggressively to try and slow down the economy and tame high prices. The strategy risks hitting the brakes too hard on economic growth and sending the economy into a recession.
Bond yields have been hovering near multiyear highs as the Fed continues to raise interest rates. The yield on the two-year Treasury, which tends to track expectations for Fed action, rose to 4.47% from 4.42% late Friday.
The 10-year yield, which influences interest rates on mortgages and many other loans, climbed to 4.04% from 4.02% late Friday.
Investors this week will be watching for another extra-large interest rate increase from the Fed. The widespread expectation is for it to push through another increase that’s triple the usual size next week. Wall Street is roughly split on whether it will do the same in December or shift to a smaller increase, according to CME Group.
Inflation has been a global problem and the European Union’s statistics agency, Eurostat, reported Monday that inflation hit another record in the 19 countries that use the euro currency, fueled by out-of-control prices for natural gas and electricity due to Russia’s war in Ukraine. According to Eurostat, annual inflation reached 10.7% in October.
Investors will be closely watching the U.S. government’s latest monthly employment report on Friday for any clues on whether the hot jobs market is cooling as inflation squeezes businesses. Wall Street still has plenty of earnings to review from big companies this week. Pfizer will report its results on Tuesday, followed by CVS on Wednesday. Starbucks reports its results on Thursday.
Joe McDonald and Matt Ott contributed to this report.
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