MARKET SNAPSHOT: Stock Market Closes Lower As Geopolitics Hamper Equity Benchmark's Record Run
Dow, S&P 500, Nasdaq dial back from records
U.S. stocks closed lower Monday, slightly below record levels, as investors grappled with a variety of geopolitical issues, such as terrorist attacks in London ahead of the U.K. election and the scheduled public testimony of fired Federal Bureau of Investigation Director James Comey.
The Dow Jones Industrial Average fell 22.25 points, or 0.1%, to 21,184.04, led lower by shares of Apple Inc. (AAPL) and United Technologies Corp.(UTX) Earlier, the average had been up by as many as 18 points.
The S&P 500 declined 2.97 points, or 0.1%, to finish at 2,436.10, with seven of its 11 sectors finishing lower, with utilities, materials and industrials leading decliners
The Nasdaq Composite Index closed own 10.11 points, or 0.2%, to 6,295.68, after inching up to an intraday record of 6,310.62 in early trading.
This week will deliver testimony by former FBI head Comey, as well as the U.K. general election, and a European Central Bank meeting. Separately, the recent terror attack in the U.K. could amplify concerns, while a rift among Gulf states, which led to a rise in crude-oil prices, could further dent sentiment.
Across the pond, The FTSE 100 index and European stocks ended lower on Monday (http://www.marketwatch.com/story/ftse-100-inches-higher-as-pound-dips-after-london-terror-attack-2017-06-05), after Saturday evening's terror attack near London Bridge. Three assailants in a van mowed down pedestrians, then went on a knife rampage in Borough Market. At least seven people died and scores were injured, 21 critically.
"The market is in a wait-and-see mode. We're trading near all-time highs, earnings season is pretty much over, and we're waiting on clarity from central banks. Outside of the terrorism factor, which has been elevated, we're still looking for the next bullish catalyst," said Adam Sarhan, chief executive of 50 Park Investments. "However, the fact that we're not down more after an attack like this is a sign of strength. So long as these kinds of attacks are fairly contained, they won't change the economic picture."
Read:Police arrest 12 in London raids after terror attack (http://www.marketwatch.com/story/police-arrest-12-in-london-raids-after-terror-attack-2017-06-04)
While the terror attack in London is tragic and the drama out of Washington is frustrating, at the end of the day, unless it's a headline that is going to change how companies do business, the market is going to stay resilient, said Karyn Cavanaugh, senior market strategist at Voya Financial.
"Every day is not going to be a record day, so when you have these pullbacks there are also investors with the fear of missing out," Cavanaugh said.
The terror incident comes just days ahead of the U.K. election on Thursday. Investors will watch to see whether Prime Minister Theresa May's Conservative Party, which is looking for backing for its strategy for exiting the European Union, will manage to keep its majority in parliament. The vote could lead to more uncertainty over Brexit.
Read:U.K. election--the worst, best and most likely scenarios for stocks world-wide (http://www.marketwatch.com/story/uk-election-the-nightmare-best-case-and-most-likely-scenarios-for-stocks-worldwide-2017-06-01)
And see: 5 things to know about the U.K. general election this week (http://www.marketwatch.com/story/5-things-to-know-about-the-uk-general-election-next-week-2017-06-01)
Economic docket: On the data front, the latest read on first-quarter output was raised to 1.7% from 1%, while a read on productivity was raised from a -0.6% read to an unchanged level. The Institute for Supply Management's index on the services sector fell 0.6 points in May (http://www.marketwatch.com/story/us-economy-keeps-up-fast-pace-in-may-ism-finds-2017-06-05), though it remains in solidly positive territory.
Factory orders fell 0.2% in April (http://www.marketwatch.com/story/factory-orders-decline-02-in-april-snapping-four-month-winning-streak-2017-06-05), snapping a four-month streak of positive months.
A turbulent week ahead: Beyond, the U.K. election and Senate hearing, featuring Comey, a meeting of the ECB in Talinn, Estonia, is scheduled on Thursday. Investors will be watching to see if the central bank offers any clues about when it will begin tapering its stimulus program.
See:Top Democrat says there's smoke, but 'no smoking gun' yet in Russia probe (http://www.marketwatch.com/story/top-democrat-says-theres-smoke-but-no-smoking-gun-yet-in-russia-probe-2017-06-04)
And check out:Trump weighing whether to block Comey testimony to Senate (http://www.marketwatch.com/story/trump-weighing-whether-to-block-comey-testimony-to-senate-2017-06-02)
In addition, stocks are entering a traditionally turbulent period, with Bespoke Investment noting that equities tend to fall around 0.79% in the two-week span between May 30 and June 13.
Read:Stock market bracing for potentially the stormiest stretch of trading this year (http://www.marketwatch.com/story/stock-market-bracing-for-potentially-the-most-explosive-stretch-of-trading-this-year-2017-06-03)
All three indexes ended at closing highs for a second straight session (http://www.marketwatch.com/story/us-stocks-poised-to-bust-out-new-records-as-optimism-about-payrolls-data-builds-2017-06-02) on Friday, as investors brushed aside a weaker-than-expected May jobs report.
Stocks to watch: Shares of TG Therapeutics Inc.(TGTX) fell 6.1%, reversing an early gain after the company announced positive trial news over the weekend (https://www.wsj.com/articles/PR-CO-20170603-903084) regarding a combination treatment for patients with previously treated high-risk Chronic Lymphocytic Leukemia.
The drugmaker said it would share the data with the Food and Drug Administration later this year to discuss filing for accelerated approval.
Apple Inc.(AAPL) shares slipped 1% after Pacific Crest downgraded shares to sector weight from overweight (http://www.marketwatch.com/story/apple-downgraded-as-analysts-say-investors-dazzled-by-iphone-8-arent-pricing-in-enough-risk-2017-06-05), saying all the good news from the iPhone 8 has been priced in, but not enough risk. A
Mallinckrodt PLC(MNK) shares slumped by 5.1% after a new call by Citron Research (http://www.marketwatch.com/story/mallinckrodt-stock-tumbles-after-new-citron-research-report-targets-40000-a-vial-drug-2017-06-05), which said it was betting for further declines in the pharmaceutical company.
Cogint Inc.(COGT) shares tumbled nearly 22% after a short seller's note alleging the data-analysis company's insiders were under investigation (http://www.marketwatch.com/story/cogints-stock-tumbles-on-heavy-volume-after-short-sellers-note-2017-06-05).
DexCom Inc.(DXCM) shares rose 5.2% after Apple CEO Tim Cook said that the Apple Watch will be able to connect better to devices like continuous glucose monitors (http://www.marketwatch.com/story/dexcom-shares-jump-nearly-4-on-tim-cooks-comments-on-glucose-monitors-at-apple-event-2017-06-05), which DexCom makes.
Gigamon Inc. (GIMO) shares rallied 9% on a report the company is exploring a sale.
Herbalife Ltd.(HLF) shares dropped 6.7% after the company cut its sales outlook (http://www.marketwatch.com/story/herbalifes-stock-drops-after-sales-warning-2017-06-05).
U.S. private-equity firm Blackstone Group LP(BX) has made a $1.98 billion takeover bid for real-estate investor Sponda PLC (http://www.marketwatch.com/story/blackstone-makes-2-bln-bid-for-finlands-sponda-2017-06-05)(SDA1V.HE) sending the Finnish company's shares surging nearly 21% on Monday.
Google-parent Alphabet Inc.(GOOGL) ended above $1,000 a share for the first time ever, nothing a record closing high for the tech giant and joining an elite group, including Amazon Inc. (AMZN), which saw its shares hit $1,000 last week for the first time ever.
Other markets: Gold prices settled up 0.2% (http://www.marketwatch.com/story/gold-extends-multiweek-high-as-risk-off-mood-hints-at-pause-for-stocks-2017-06-05) at $1,282.70 an ounce. The British pound ticked slightly higher following a slip after Saturday evening's terror attack (http://www.marketwatch.com/story/pound-slips-against-dollar-in-wake-of-london-attack-2017-06-05). Asian stocks finished the day largely weaker (http://www.marketwatch.com/story/asian-markets-hold-steady-shaking-off-uk-turmoil-2017-06-04).
Oil prices fell 1.5% to close at $47.66, eliminating a gain of more than 1% (http://www.marketwatch.com/story/oil-prices-jump-after-saudi-arabia-other-middle-east-nations-cut-ties-with-qatar-2017-06-05) seen earlier in the European session and in Asian trading. That rise was driven by news that Saudi Arabia, Egypt, Bahrain and the United Arab Emirates had cut relations with Qatar after accusing the country of interfering in internal affairs and supporting terrorism (http://www.marketwatch.com/story/saudi-arabia-bahrain-uae-sever-diplomatic-relations-with-qatar-2017-06-04).
Check out: Here's what you need to know about Saudi Arabia's spat with Qatar (http://www.marketwatch.com/story/heres-what-you-need-to-know-about-saudi-arabias-spat-with-qatar-2017-06-05)
That news left the Qatar QE index down more than 7% on Monday (http://www.marketwatch.com/story/qatar-stocks-on-pace-for-biggest-1-day-drop-since-2014-after-mideast-diplomatic-rift-2017-06-05). The iShares MSCI Qatar Capped ETF (QAT), the largest exchange-traded fund to track the country's equity market, sank 9.1%.
--Barbara Kollmeyer in Madrid contributed to this article.
(END) Dow Jones Newswires
June 05, 2017 16:40 ET (20:40 GMT)