S&P 500 and Dow gain to close at record highs; Nasdaq holds slightly lower

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Shares recovered earlier losses on Monday to narrowly eke out contemporary file ranges as traders seemed previous geopolitical and development considerations. 

The S&P 500 turned barely constructive within the closing hours of buying and selling, logging a file excessive. The Dow additionally reached a file shut, whereas the Nasdaq held decrease. The benchmark 10-year Treasury yield fell again under 1.3%. U.S. West Texas intermediate crude oil futures sank by greater than 1% to commerce round $67 per barrel. 

The sooner strikes decrease – with the Dow down by as many as 284 factors at session lows – got here as jitters over the tempo of worldwide financial development and dangers to the outlook elevated, with new financial knowledge out of China disappointing on a number of fronts. Retail gross sales and industrial manufacturing every slowed greater than anticipated on this planet’s second-largest financial system in July, suggesting a extra marked development deceleration within the second half of the yr because the nation tries to include fallout from the most recent resurgence in coronavirus circumstances. 

Elsewhere, dysfunction in Afghanistan weighed additional on international markets, with chaos reported on the Kabul airport as civilians tried to flee from the nation swiftly overtaken by the Taliban. 

Lingering worries in regards to the Delta variant have additionally been at play for traders, offset solely partially by optimism over what has been to-date an exceptionally robust company earnings season. This week, a handful of further S&P 500 index elements will report quarterly outcomes, with retail names like Walmart (WMT), Goal (TGT) and Dwelling Depot (HD) set to be among the many most intently watched. 

“I believe it will be very key to listen to from U.S. retail corporations to see not provided that this Delta variant surge is having any impression to shopper habits, but in addition to what their projections are for the remainder of the yr, on condition that we’re within the again to highschool spending season,” Margaret Reid, senior portfolio supervisor at Union Financial institution, informed Yahoo Finance. “And we’ll additionally get July retail gross sales … so numerous incremental knowledge factors within the coming week with ties to the Delta variant.” 

As of Friday afternoon, 91% of S&P 500 corporations had reported second-quarter earnings outcomes, and 87% of those had topped consensus estimates on earnings per share, in response to FactSet. The anticipated total development fee for S&P 500 earnings stands at 89.3%, which might be the quickest enhance because the fourth quarter of 2009. 

In keeping with many pundits, the sturdy rebound in company earnings has been and can doubtless proceed to be gasoline for the market going ahead, serving to to counterbalance considerations over an inevitable deceleration in development because the restoration matures. 

“In an earnings season with many surprises – together with the best frequency of EPS [earnings per share] beats in our 22-year knowledge historical past – probably the most notable was the surge in company buyback exercise,” David Kostin, chief U.S. fairness strategist for Goldman Sachs, wrote in a observe on Monday. “Sturdy company fairness demand is one purpose we forecast a 5% return to our S&P 500 year-end goal of 4700.” 

4:10 p.m. ET: S&P 500 and Dow acquire to shut at file highs; Nasdaq holds barely decrease

Right here have been the principle strikes in markets as of 4:10 p.m. ET:

  • S&P 500 (^GSPC): +11.71 (+0.26%) to 4,479.71

  • Dow (^DJI): +110.02 (+0.31%) to 35,625.40

  • Nasdaq (^IXIC): -29.13 (-0.20%) to 14,793.76

  • Crude (CL=F): -$0.99 (-1.45%) to $67.45 a barrel

  • Gold (GC=F): +$11.20 (+0.63%) to $1,789.40 per ounce

  • 10-year Treasury (^TNX): -4 bps to yield 1.2570%

12:12 p.m. ET: Three elements underpinning cyclical shares’ newest transfer larger: Strategist

Over the previous month, the financials, supplies and healthcare sectors have been the outperformers within the S&P 500, as cyclical shares with earnings tied to the financial restoration caught one other bid larger regardless of ongoing considerations over the Delta variant.

In keeping with one strategist, three key elements have been behind the most recent rotation.

“The U.S. knowledge’s been pretty robust regardless of a few of the Delta threat,” Stuart Kaiser, UBS head of equity derivatives, told Yahoo Finance. “We obtained via earnings. Sometimes throughout earnings, large-cap tech performs very well and that larger high quality inventory does a bit higher as a result of they’re reporting actually robust outcomes. So I believe getting via earnings helped individuals get the boldness to get into these decrease high quality cyclicals.”

“After which the third half could be on the charges aspect, it seems to be like yields have bottomed a bit and began to rise a contact, and that tends to be typically constructive for cyclicals,” he added. “I believe a mixture of these three issues in addition to lots of people have cited knowledge out of the UK exhibiting that the Delta variant hasn’t fully disrupted their financial system … so perhaps that trims the tail threat as properly.”

10:12 a.m. ET: New York State manufacturing exercise slid greater than anticipated in August 

The New York Federal Reserve’s intently watched Empire State manufacturing exercise index pulled again greater than anticipated in August, signaling a pointy deceleration within the goods-producing sector after July’s file surge.

The Empire State index dipped to 18.3 in August from 43.0 a month earlier, in response to the brand new report Monday morning. Consensus economists have been searching for a print of 28.5, in response to Bloomberg knowledge. Readings above 0 point out growth in a sector.

Provide chain points continued to be a serious supply of stress on the manufacturing sector, each within the state and nation-wide. Nevertheless, indexes monitoring future new orders and shipments every elevated through the month, as did manufacturing companies’ assessments of the six-month outlook. 

9:30 a.m. ET: Shares open decrease

This is the place markets have been buying and selling Monday morning: 

  • S&P 500 (^GSPC): -13.48 (-0.3%) to 4,454.52

  • Dow (^DJI): -117.44 (-0.33%) to 35,397.94

  • Nasdaq (^IXIC): -48.87 (-0.33%) to 14,774.03

  • Crude (CL=F): -$1.99 (-2.91%) to $66.45 a barrel

  • Gold (GC=F): +$5.30 (+0.3%) to $1,783.50 per ounce

  • 10-year Treasury (^TNX): -4.7 bps to yield 1.25%

8:33 a.m. ET: Tesla shares fall after U.S. regulators open formal probe into Autopilot crashes 

Shares of Tesla (TSLA) declined by greater than 1.5% on Monday after U.S. regulators stated they opened a proper security investigation into Tesla’s Autopilot system following a string of crashes.

The Nationwide Freeway Visitors Security Administration (NHTSA) stated it had recognized 11 crashes since January 2018 throughout which Tesla fashions struck automobiles concerned in first responder scenes. Consequently, the company stated it had opened a probe evaluating the Autopilot in Tesla automobiles made between 2014 and 2021. 

7:44 a.m. ET Monday: Inventory futures level to a decrease open

This is the place markets have been buying and selling Monday morning:

  • S&P 500 futures (ES=F): -13.00 factors (-0.29%) at 4,449.50

  • Dow futures (YM=F):-103.00 factors (-0.29%) to 35,317.00

  • Nasdaq futures (NQ=F): -44.00 factors (-0.29%) to fifteen,081.75

  • Crude (CL=F): -$1.22 (-1.78%) to $67.22 a barrel

  • Gold (GC=F): -$5.20 (-0.29%) to $1,773.00 per ounce

  • 10-year Treasury (^TNX): -1.7 bps to yield 1.28%

Folks stroll previous the New York Inventory Change (NYSE) at Wall Avenue on February 17, 2021 in New York Metropolis. (Picture by Angela Weiss / AFP) (Picture by ANGELA WEISS/AFP by way of Getty Photographs)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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