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Miner Newmont drops on Newcrest bid
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Chinese stocks fall on geopolitical jitters
(Recasts with end of trading, adds analyst comment, market
details)
By Carolina Mandl, Shubham Batra and Johann M Cherian
Feb 6 (Reuters) - The main U.S. stock indexes ended
lower on Monday as investors shifted gears after considering the
possibility that the U.S. Federal Reserve may take longer to
start cutting interest 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 rhetoric after data last week
showed services activity was strong in January as well as strong
job growth.
"We got that blowout jobs report, and people have had to
reassess what the outlook for the Fed and the economy is.
Tomorrow it will be interesting to see if Powell continues his
transformation from hawk to dove," said Brian Jacobsen, senior
investment strategist at Allspring Global Investments.
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.
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 four-week high. On the corporate side, analysts expect quarterly earnings of
S&P 500 firms to decline 2.8% in the fourth quarter, according
to Refinitiv.
According to preliminary data, the S&P 500 lost 25.28
points, or 0.61%, to end at 4,111.20 points, while the Nasdaq
Composite lost 119.63 points, or 1.00%, to 11,887.33.
The Dow Jones Industrial Average fell 40.56 points, or
0.12%, to 33,885.45.
Tyson Foods Inc fell sharply after missing analysts' estimates for quarterly revenue and profit. Miner Newmont Corp slid 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 rose 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. Meme stocks, such as AMC Entertainment and Gamestop , also gained steam late in the session. U.S.-listed Chinese stocks such as Pinduoduo Inc and Baidu Inc fell 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. Most of the 11 major S&P 500 sector indexes were in the red, except for utilities. (Reporting by Shubham Batra and Johann M Cherian in Bengaluru and Carolina Mandl in New York Editing by Shounak Dasgupta and Matthew Lewis)
