Monday Blues Persists: Stocks Inch Lower
FOX Business: The Power to Prosper
U.S. stocks retreated fractionally on Monday, erasing just a slice of last week’s ECB-fueled surge and giving the Dow its longest Monday losing streak since the Nixon Administration.
Today’s Markets
The Dow Jones Industrial Average fell 2.65 points, or 0.02%, to 13073.01, the S&P 500 lost 0.67 point, or 0.05%, to 1385.30, the Nasdaq Composite declined 12.25 points, or 0.41%, to 2945.84 and the FOX 50 gained 0.20 points, or 0.02%, to 1039.21.
Monday’s lackluster trading action lacked major catalysts, with few noteworthy economic or earnings reports released and a decrease in chatter out of the tumultuous eurozone that has loomed above Wall Street for much of the past six months.
The result was a market that drifted in and out of negative territory more than 50 times, ultimately leaving the blue chips in the red for the ninth-straight Monday -- the longest such streak since they tumbled 11 consecutive Mondays in 1973, according to Dow Jones Newswires.
“The big move Thursday and Friday is meeting a little bit of skepticism today,” said Michael James, managing director of equity trading at Wedbush Securities. “Traders are somewhat cautious about commentary versus actions coming from Europe. It sounds good but the proof is in the details.”
The cautious trading comes as Wall Street embarks on what could be a very significant week as central bankers in the U.S., eurozone and U.K. are all scheduled to meet and could unleash new measures aimed at easing lingering economic strains.
Last week the S&P 500 leaped to its highest level since May 3 and the Dow surged over 250 points and recaptured the 13000 threshold after European Central Bank President Mario Draghi promised to do whatever it takes to preserve the euro. Reports followed suggesting the ECB could take more aggressive steps, including direct bond purchases.
While European markets rallied to four-month highs on Monday, the euro dipped about 0.51% against the dollar to $1.2257.
“It seems you can only declare your intention to save the euro so many times before the excitement wears off; markets are now awaiting firm action to back up the impressive words,” Chris Beauchamp, market analyst at IG Index, wrote in a note.
The eurozone crisis was front and center on Monday as Treasury Secretary Tim Geithner huddled with Draghi as well as with his German counterpart, Wolfgang Schauble.
The two finance ministers issued a joint statement that said little new, highlighting the "need for policymakers to adopt and implement all reform steps required to deal with the financial crisis and crisis of confidence.
Most of the Dow's 30 stocks landed in the red, led by J.P. Morgan Chase (NYSE:JPM) and Hewlett-Packard (NYSE:HPQ). The index's biggest percentage winners were tech giant Cisco Systems (NASDAQ:CSCO) and Coca-Cola (NYSE:KO), which announced plans to consolidate its operating structure.
All eyes will be on the Federal Reserve later this week as the odds the central bank will unleash a third round of quantitative easing to aid the economy continue to rise. The Fed’s decision is scheduled to be handed down on Wednesday.
And then on Thursday the ECB is scheduled to announce its policy decision, with the bar significantly raised by Draghi's comments last week.
Wall Street hasn’t received much of a boost from earnings season, which is a little more than half over and has produced a number of big-name disappointments like Apple (NASDAQ:AAPL) and Facebook (NASDAQ:FB).
Just 40% of S&P 500 companies have beaten revenue estimates, the lowest level in at least a decade, according to S&P Capital IQ. Companies have also been pessimistic about the outlook, providing the most negative guidance since 2001, Thomson Reuters says.
In commodities, crude oil fell 35 cents a barrel, or 0.39%, to $89.78. Gold rose for the fourth consecutive day, gaining $1.70 a troy ounce, or 0.11%, to $1,619.70.
Corporate Movers
Chicago Bridge & Iron (NYSE:CBI) unveiled a deal to acquire engineering and construction giant Shaw Group (NASDAQ:SHAW) for $3.04 billion in cash and stock. The $46-a-share deal represents a lofty 72% premium on Shaw's closing price on Friday.
HSBC (NYSE:HBC) suffered a 9% dip in first-half profits after setting aside $2 billion to resolve a series of scandals, including $700 million tied to an anti-money laundering scandal in the U.S.
Coca-Cola (NYSE:KO) spelled out plans to revamp its operating structure by slimming down to three major business segments: Coca-Cola International, Coca-Cola Americas and Bottling Investments Group. The move is aimed at streamlining reporting lines and intensifying focus on key markets.
CIT Group (NYSE:CIT) widened its second-quarter loss to 35 cents a share, surpassing consensus calls for a wider loss of 41 cents a share. The commercial lender, which emerged from bankruptcy in 2009, was hit by higher expenses
Global Markets
London’s FTSE 100 rallied 1.18% to 5693.63, Germany’s DAX jumped 1.27% to 6774.06 and France’s CAC 40 leaped 1.24% to 3320.71 -- its highest level since April 3.
In Asia, Japan’s Nikkei 225 advanced 0.80% to 8635.44 and Hong Kong’s Hang Seng soared 1.61% to 19585.40.