Shares fell on Monday as traders took a break after the S&P 500 and Dow recorded new record highs last week.
The Dow retreated slightly, shaking off less than 100 points to stay just below the recent all-time high. The S&P 500 fell, and the Nasdaq underperformed as technology stocks returned recent gains.
The cyclical energy and financial sector has outperformed the broader market so far in 2021, surpassing the technology-heavy sectors that led the market higher last year. However, this rotation lost steam in April, with information technology, communications services and the consumers’ discretionary sectors outperforming the month-to-date.
Investors have been eagerly looking forward to the start of the earnings season over the past week, with major banks starting the first quarter reporting season later this week. A whole lot of much stronger than expected economic data has suggested that corporate profits will rise in line with the returning economy, especially in the sectors most deeply affected by the coronavirus pandemic.
“The initial reopening of the economy will cause a huge surge in margins in all sectors hit hardest by the COVID crisis,” Pantheon Macroeconomics chief economist Ian Shepherdson wrote in a note on Monday. “The unprecedented surge in household cash balances over the past year – mostly due to the forced decline in spending on services, supplemented by stimulus payments – represents a potential wave of demand, while supply is limited by business failures, particularly in the restaurant sector. ”
“It looks like Fed officials have been supported for a period of margin expansion. President Powell has often talked about the likelihood that ‘inflation will be’ COVID ‘transition’, but the key question is whether it’s a sustained increase in inflation, “Shepherdson added.
However, the Federal Open Market Policy makers are so far unclear because the upward price pressure could be more than volatile. And Fed Chairman Jerome Powell suggested on Sunday that the risks are still tilted to the detriment – not overheating – when it comes to the economy after the pandemic, telling CBS News in a 60-minute interview that ‘ a “main concern” is that we reopen too quickly, people will return to their old practices too quickly, and we will see an increase in cases again. ‘
–
09:30 ET: Stocks open lower, below record levels
Here’s where markets traded on Monday morning shortly after the market opened:
-
S&P 500 (^ GSPC): -7.14 points (-0.17%) to 4,111.66
-
Dow (^ DJI): -71.71 points (-0.21%) to 33,728.89
-
Nasdaq (^ IXIC): -46.10 points (-0.33%) to 13,854.08
-
Ru (CL = F): + $ 1.24 (+ 2.09%) to $ 60.59 a barrel
-
Gold (GC = F): – $ 7.30 (-0.42%) to $ 1,737.50 per ounce
-
10-year Treasury (^ TNX): +0.7 bps to produce 1.673%
–
08:36 ET: Microsoft agrees to buy AI speech recognition company Nuance Communications in a $ 19.7 billion deal
Microsoft (MSFT) announced Monday morning that it has agreed to buy the speech recognition company Nuance Communications (NUAN) for artificial intelligence in cash worth $ 19.7 billion, including Nuance’s debt. The announcement confirms the earlier reporting over the weekend by Bloomberg.
Microsoft bought Nuance for $ 56.00 a share and offered a premium of 23% above Nuance’s closing price last Friday. Nuance’s range of products includes a range of transcription and other speech recognition services used by healthcare providers, including PowerScribe One and Dragon Medical One.
“Nuance provides the AI layer at the healthcare point of view and is a pioneer in the actual application of AI,” Microsoft CEO Satya Nadella said in a press release. ‘AI is technology’s top priority, and healthcare is its top application. Together with our partner ecosystem, we will place advanced AI solutions everywhere in the hands of professionals to enable better decision making and create more meaningful connections as we can accelerate the growth of Microsoft Cloud in Healthcare and Nuance. ”
–
07:53 ET: Uber shares jump a record month after the delivery industry in March, confirming the lucrative timeline again
Shares of Uber (UBER) rose 2.2% early in the morning after the company said in a security statement that its delivery business had risen to an annual record rate of $ 52 billion in March, with a surge in food in the pandemic. era. delivery expanded into the first months of this year. The annual gross booking rate was a jump of more than 150% compared to last year.
Uber’s food delivery industry served as the company’s growth engine during the pandemic, while demand for ride-sharing services declined. However, the mobility business showed signs of booming last month, with a higher rate of $ 30 billion than the best price since March last year. Average daily gross bookings increased by 9% month-on-month.
“As vaccination rates in the United States rise, we see that consumer demand for mobility is recovering faster than drivers’ availability, and that consumer demand for delivery is still exceeding courier availability,” Uber said. “We still believe that Uber is on track to achieve quarterly adjusted EBITDA profitability in 2021.”
–
07:08 ET :: Stock futures indicate lower open point and pull back from record highs
Here’s where markets traded on Monday morning:
-
S&P 500 futures (ES = F): 4111.75, with 7.75 points or 0.19% lower
-
Dow futures (YM = F): 33,621.00, 61 points lower or 0.18%
-
Nasdaq futures (NQ = F): 13,782.00, with 47.5 points or 0.34% lower
-
Ru (CL = F): $ 60.06 per barrel, + $ 0.74 (+ 1.25%)
-
Gold (GC = F): $ 1,740.80, – $ 4.00 (-0.23%)
-
10-year Treasury (^ TNX): -0.4 bps to produce 1.662%
–
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
Read more about Emily: