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Miner Newmont drops on Newcrest bid
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Chinese stocks fall on geopolitical jitters
(Adds analyst comments, updates prices, adds market details)
By Carolina Mandl, Shubham Batra and Johann M Cherian
Feb 6 (Reuters) - The main U.S. stock indexes fell on
Monday as investors shifted gears after considering the
possibility that the U.S. Federal Reserve may take longer to
start cutting rates.
Traders are keeping a close eye on speeches by Fed officials
this week, including Chair Jerome Powell on Tuesday, for any
change in the central bank's dovish rhetoric after data last
week showed services activity was strong in January as well as
strong job growth.
U.S. Treasury Secretary Janet Yellen said on Monday the
United States may avoid a recession as inflation is coming down
while the labor market remains strong.
"As the economy is proving to be more resilient, the odds of
recession are dwindling and then there's less of a need for rate
hikes or rate cuts, more imminently because of the diminishing
odds of a hard landing in the first half of this year," said
Jack Janasiewicz, lead portfolio strategist and portfolio
manager at Natixis Investment Managers Solutions.
After taking a hit in 2022, U.S. equities have recovered
strongly in 2023, led by megacap growth stocks amid short-lived
hopes that the Fed will temper its aggressive rate hikes, which
in turn could alleviate some pressure on equity valuations.
Money market participants now see the benchmark rate peaking
at 5.1% by July, in line with what most policymakers have backed
repeatedly. Yield on the 10-year U.S. Treasury note extended
gains to a month's high. On the corporate side, analysts expect quarterly earnings of
S&P 500 firms declining 2.8% in the fourth quarter, according to
Refinitiv.
At 2 p.m. EST (1900 GMT), the Dow Jones Industrial Average fell 33.05 points, or 0.1%, to 33,892.96, the S&P 500 lost 21.7 points, or 0.52%, to 4,114.78 and the Nasdaq
Composite dropped 89.69 points, or 0.75%, to 11,917.27.
Tyson Foods Inc plunged 4.7% after missing analysts'
estimates for quarterly revenue and profit.
Miner Newmont Corp slid 4.8% on its $16.9 billion
offer for Australian peer Newcrest Mining Ltd to build
a global gold behemoth.
Contrary to the overall trend, Tesla Inc climbed 3%
after a U.S. jury on Friday found Chief Executive Elon Musk and
his company were not liable for misleading investors when Musk
tweeted in 2018 that he had "funding secured" to take the
electric-vehicle maker private.
U.S.-listed Chinese stocks such as Pinduoduo Inc and
Baidu Inc fell 3.1% and 1.0%, respectively, on
geopolitical concerns after a U.S. military fighter jet shot
down a suspected Chinese spy balloon off the coast of South
Carolina on Saturday.
Many of the 11 major S&P 500 sector indexes were in the red,
except for consumer discretionary, utilities and consumer
staples.
Declining issues outnumbered advancing ones on the NYSE by a
3.88-to-1 ratio; on Nasdaq, a 1.96-to-1 ratio favored decliners.
The S&P 500 posted 5 new 52-week highs and 1 new lows the
Nasdaq Composite recorded 72 new highs and 18 new lows.
(Reporting by Shubham Batra and Johann M Cherian in Bengaluru
and Carolina Mandl in New York
Editing by Shounak Dasgupta and Matthew Lewis)
