NEW YORK: Declines in commodity-sensitive shares pulled U.S. stocks slightly lower Monday.
Investors broadly held off from making major bets, traders said, ahead of a number of corporate earnings this week from companies, including Apple, Facebook, Procter & Gamble and Exxon Mobil, as well as two major central-bank meetings.
It was 2016’s second-lowest volume day, with just 5.9 billion U.S. shares traded, compared with the year-to-date daily average of 8.1 billion.
The Dow Jones Industrial Average has advanced in eight of the past 10 weeks through Friday, propelling the blue-chip index near its all-time high. But the pace of gains has moderated in recent sessions. The Dow’s 0.6% increase last week marked its smallest weekly rise this year.
The stock market Monday “sold off, and it sprang right back,” said Robert Pavlik, senior portfolio manager at Boston Private Wealth LLC. “These issues, though, still percolate under the surface,” he added, pointing to concerns on China’s economic growth, the impact of negative interest rates on the global economy and the Federal Reserve’s plan for raising interest rates.
The Dow slipped 26.51 points, or 0.1%, Monday to 17977.24 after falling as much as 148 points earlier in the session. The S&P 500 fell 3.79, or 0.2%, to 2087.79. The Nasdaq Composite lost 10.44, or 0.2%, to 4895.79.
Energy stocks fell the most in the S&P 500, losing 1.1%. Transocean shares declined 53 cents, or 4.9%, to $10.26 and Cabot Oil & Gas fell 97 cents, or 4.2%, to 22.29.
U.S. crude oil fell 2.5% to $42.64 a barrel.
Xerox dropped 1.49, or 13%, to 9.68 after saying its first-quarter profit fell 85%.
Perrigo trimmed its guidance for the year and announced the departure of Chief Executive Joseph Papa, who is moving to Valeant Pharmaceuticals International. Perrigo slid 21.95, or 18%, to 99.40. Valeant sank 82 cents, or 2.3%, to 35.16 in the U.S.
Caterpillar said CEO Doug Oberhelman’s compensation for 2015 rose 4.5% to $17.9 million, but his performance-based pay dropped. The company on Friday cut its outlook for the year. Its shares fell 1.53, or 2%, to 76.79 Monday.
Gannett proposed to acquire Tribune Publishing in a deal valued at about $400 million. Gannett shares rose 1.02, or 6.5%, to 16.79. Tribune jumped 3.98, or 53%, to 11.50.
The Federal Reserve and Bank of Japan are scheduled to meet later this week. While Fed officials are unlikely to raise short-term interest rates at the conclusion of their meeting on Wednesday, investors will watch for any hints at the bank’s economic assessment and whether it will act at its June meeting. Many investors anticipate that the BOJ will launch additional stimulus measures at its meeting on Thursday, following a recent appreciation of the Japanese currency and a slump in the country’s stock market.
“While markets appear to have stabilized in the past few days, the Bank of Japan will likely need to ease to reassure markets and pre-empt downside risks,” said Betty Wang, economist at Standard Chartered.
Federal-funds futures, which are used by investors and traders to place bets on U.S. central-bank policy, showed no chance of a rate rise at the Fed’s April policy meeting and just a 23% likelihood of a rate increase in June, according to data from CME Group.
“If they did decide to hike rates the market would go off a cliff because no one is expecting it,” said Randy Frederick, managing director of trading and derivatives at Charles Schwab. He added that several updates on the U.S. economy are due before the Fed’s June meeting, including Thursday’s reading on first-quarter U.S. growth, which could shift expectations for rate increases later this year.
Japan’s Nikkei Stock Average dropped 0.8% on Monday, as a stronger yen weighed on shares of exporters. The dollar fell 0.5% against the yen to ¥111.20 late in New York. For the year so far, the dollar has fallen 7.6% against the yen.
Hong Kong’s Hang Seng Index fell 0.8%, while the Shanghai Composite Index lost 0.4%.
The Stoxx Europe 600 dropped 0.5% and Germany’s DAX fell 0.8%. German business sentiment deteriorated unexpectedly in April, a survey by Germany’s Ifo Institute showed.
Government-bond yields have advanced around the world recently. The yield on the 10-year U.S. Treasury note rose to 1.902%, from 1.888% on Friday. It was 1.642% on Feb. 11. Prices fall as yields rise.
Gold for April delivery rose 0.8% to $1,238.90 an ounce.