Stocks fell on Monday as tech shares declined, while investors fretted over higher interest rates. Wall Street also zeroed in on the busiest week of the earnings season.
The Dow Jones industrial average closed 14.25 points lower at 24,448.69 — notching its first four-day losing streak since March — with Goldman Sachs as the worst-performing stock in the index.
The Nasdaq composite pulled back 0.3 percent to close at 7,128.60, its third straight decline, as Facebook, Amazon, Netflix and Alphabet all closed lower. The S&P 500 closed flat at 2,670.29 as a 0.4 percent decline in tech offset a 1.1 percent gain in telecommunications.
The 10-year Treasury note yield hit a high of 2.99 percent, threatening to reach 3 percent. The benchmark rate last traded at 3 percent or higher in January 2014. Investors have been selling Treasurys this month — pushing yields higher — amid expectations of rising inflation, which could prompt the Federal Reserve to tighten monetary policy at a faster pace.
“Any time there are inflation concerns, that’s going to spook the market,” said Mark Esposito, CEO of Esposito Securities. “If the 10-year goes over 3 percent, that could be a catalyst for the market” to go lower.
Wall Street also braced for the busiest week of the earnings season. More than 170 companies are expected to have released their quarterly results by the end of the week, including tech giants Amazon and Facebook.
Hasbro, Halliburton and Alaska Air all posted quarterly results before the bell Monday. Hasbro earnings and sales fell short of estimates, but the stock traded 3 percent higher. Halliburton’s quarterly profit matched analyst expectations, while its revenue missed. Alaska Air reported a stronger-than-expected profit but disappointing revenue.
Overall, this earnings season has been strong thus far. More than 82 percent of S&P 500 companies that have reported through Monday morning have topped earnings estimates, according to FactSet.
However, a lot of companies have seen their stocks fall after reporting during this season.
“Expectations have been built up so much in light of the tax cuts” that investors seem disappointed, said Kim Forrest, senior equity analyst at Fort Pitt Capital.
Elsewhere in corporate news, shares of Merck rose 2.4 percent after an upgrade from Goldman Sachs. Analysts at the investment bank said the Dow member’s sales could boom because of Keytruda, a blockbuster drug used to treat lung cancer.
Caterpillar climbed 0.5 percent after Citi raised its rating on the Dow component, citing a construction rebound in China. Citi also points to positive estimate revisions and increased capital returns as reasons for the upgrade.
Meanwhile, Alcoa shares plummeted 13.5 percent after the U.S. government said it would not impose previously announced sanctions against Rusal until October.