Small-Cap Stocks Lead Losses as Markets Turn
The U.S. stock market turned negative on Monday as key benchmarks relinquished early morning gains. Small-cap and tech stocks led the losses. In the absence of economic news, the markets, led mostly by computer-driven trading, may signal that stock values remain elevated and may need to retreat before pushing higher.
The S&P 500 fell below its 50-day moving average last week and has struggled to move above that threshold even after the rally on Friday.
Meanwhile, the S&P 500 (SPX) fell 6 points, or 0.3%, to 1,961.99. The Dow Jones Industrial Average (DJI) fell 36 points, or 0.2%, to 16,973.73. The Nasdaq Composite (RIXF) lost 24 points, or 0.5%, to 4,452.05. The Russell 2000 (RUT) fell 11 points, or 1%, to 1,094.
Last Friday's strong jobs report led to the S&P 500 registering its biggest gain in nearly two months. The U.S. economy last month added 248,000 jobs and the unemployment rate fell below 6%, to 5.9%, for the first time since 2008, outpacing expectations.
The report showed wage growth is stagnating, which appeared to curb concerns about rising inflation -- a closely watched metric, which, if elevated, could prompt the Fed to quickly raise interest rates.
Fed speakers: Kansas City Fed President Esther George, who has supported an interest-rate hike sooner rather than later, will talk about the U.S. economy after the market closes. George, who isn't a voting member of the Fed policy committee this year, will speak at 8:30 p.m. Eastern Time in Albuquerque, NM.
Stocks on the move: Hewlett-Packard (NYSE:HPQ) shares climbed 4.3% as the company said it plans to split into two, separating its personal-computer and printer businesses from its corporate hardware and services operations.
Medical technology company Becton, Dickinson (NYSE:BDX) has reached a deal to buy CareFusion (NYSE:CFN) for $12.2 billion in cash and stock. CareFusion shares rallied 23%.
Tesla Motors (NASDAQ:TSLA) is set to unveil its Model 3 mass-market car and new versions of its Model S sedan at an event on Thursday, according to Global Equities Research analyst Trip Chowdhry. Tesla shares were up 1.9%.
H&R Block (NYSE:HRB) shares fell 4.9% after the tax services company said regulatory approval for the sale of H&R Block Bank won't be completed in the current year.
Sunesis Pharmaceuticals (NASDAQ:SNSS) sank 70% after the company said a late-stage trial of a cancer treatment failed to meet its primary goals.
Other markets: The dollar slightly pulled back against major rivals after Friday's climb. Japan's Nikkei Average and Hong Kong's Hang Seng Index each rose more than 1%, and European stocks advanced.
Oil futures edged higher, while gold prices picked up $3.2 an ounce, but traded below $1,200 an ounce. Gold on Friday turned negative for the year.