MARKET SNAPSHOT: U.S. Stocks Edge Lower As Energy, Financials Drop
By Victor Reklaitis and Anora Mahmudova, MarketWatch
Drop in oil prices weighs on energy shares
U.S. stocks were under pressure on Monday, as investors sold financial shares after last week's interest-rate hike by the Federal Reserve and as a drop in oil prices weighed on the energy sector.
Chicago Federal Reserve President Charles Evans , in an interview with Fox Business, said he would support three rate hikes in total this year if economic improvement persists and four increases if inflation accelerates above the central bank's 2% target.
The S&P 500 was off 4 points, or 0.2%, at 2,374 with all seven of the 11 main sectors trading lower. Energy and financials shares were leaders losses, down about 0.7%.
The Dow Jones Industrial Average was flat at 20,903 with two-thirds of the blue-chip companies trading in positive territory. Walt Disney Co.(>> Walt Disney Co) and Nike, Inc.(>> Nike Inc) were leading the gains, while Travelers Co.(>> Travelers Companies Inc) and Home Depot, Inc.(>> Home Depot Inc) were the top decliners.
Meanwhile, the Nasdaq Composite Index was off by 4 points, or 0.1%, at 5,896, hovering its all-time closing high, hit as the month began.
"This is what we call a classic 'backing and filling' in the market. Investors may be somewhat clear about the monetary policy but now waiting to see what happens legislatively," said Maris Ogg, president at Tower Bridge Advisors.
Ogg is optimistic about earnings over the next couple of years.
"We have one most business-friendly administrations which we expect to spur capital spending by companies, leading to better earnings growth," Ogg said.
This week brings a heavy lineup of Fed speakers. After the central bank's decision to resume interest rate increases, their comments could dictate the direction of stocks. But nothing they say would trigger a major selloff that could be construed as a buying opportunity, according to Robert Pavlik , chief market strategist at Boston Private Wealth.
Other markets: Oil futures fell on Monday, as some analysts blamed the drop on global growth worries after G-20 officials removed anti-protectionist language from a policy statement.
European equities lost ground, while Asian markets were mixed. Gold futures stepped higher, and a key dollar index edged lower.
Economic news: Chicago's Evans in an interview on the Fox Business cable channel said that he expected the U.S. economy grow at a 2.25% pace this year. He also suggested that if the economy continues to grow as expected and inflation flares up, he would support four rate hikes this year.
Evans is also scheduled to give a speech at the New York Association of Business Economics at 1:10 p.m. Eastern.
Stock movers: Energy shares were leading losses, dragging indexes down. Transocean Ltd(>> Transocean LTD) and Southwestern Energy Co.(>> Southwestern Energy Company) were the top decliners on the S&P 500, down 4% and 3% respectively.
Shares of Tiffany & Co. (>> Tiffany & Co.) rose 2% after analysts at William Blair upgraded the stock.
Walt Disney Co. (>> Walt Disney Co) shares gained 0.7% after 'Beauty and the Beast' topped the box-office ticket sales over the weekend.
The U.S.-listed shares for Deutsche Bank AG(>> Deutsche Bank AG) (>> Deutsche Bank AG) traded 3.6% lower after the German lender issued new shares to raise nearly $9 billion. The bank also indicated that it slashed bonuses paid to staff by 80% last year after suffering its second consecutive full-year loss.
Sprouts Farmers Market Inc.(>> Sprouts Farmers Market Inc) was off 1.3% following reports (http://www.reuters.com/article/us-albertsons-cos-sprouts-idUSKBN16Q0XG) that supermarket operator Albertsons Companies Inc. held preliminary merger talks with the organic grocery chain. Whole Foods Market Inc.(>> Whole Foods Market, Inc.) rose 1%.
Movado Group Inc.'s stock (>> Movado Group, Inc) fell 2.3% after the watchmaker reported quarterly results that missed expectations and announced plans to cut jobs.