Stocks turn lower as traders brace for earnings season
Stocks turned lower Monday as Wall Street got ready for the start of the latest earnings season.
The Dow fell 20 points, the S&P 500 slid 0.1 percent, and the Nasdaq lost 0.15 percent.
“The overall earnings season, I think, is going to be a continuation of what we saw in the first quarter,” said Art Hogan, a chief market strategist at Wunderlich Securities. Earnings for the S&P 500 grew by 15 percent.
Traders had high hopes for earnings from large-cap technology companies.
Tech stocks have been the best performers of 2017 thus far, with the sector rising 17 percent. But the sector has struggled over the past month, slipping 1.3 percent.
That said, analysts at Goldman Sachs like tech heading into earnings season. In a note Friday, David Kostin, chief U.S. equity strategist at Goldman Sachs, said he sees better-than-expected margin expansion for the sector. “Info Tech margins beat consensus forecasts in 1Q and we estimate full-year 2017 Info Tech margins will be stable at 19.9%,” he said.
Shares of Tesla fell 0.8 percent in the premarket. The stock entered a bear market last week, trading more than 20 percent below its all-time high.
Amazon’s stock rose before the bell as the company got set for its so-called Prime Day. Prime Day features big deals for Amazon’s Prime customers.
Stocks ended last week on a high note, eking out a weekly gain after a strong U.S. employment report.
There are no major economic data due Monday. However, key inflation data, along with monthly retail sales, are due out at the end of the week. Federal Reserve Chair Janet Yellen is also scheduled to testify in front of Congress Wednesday and Thursday.
“The economic calendar goes dark until later this week. Although Janet Yellen will march up the steps of Capitol Hill on Wednesday, the Chairman will likely not add any new pieces to the current monetary policy puzzle. Hence, portfolio managers have started to shift their focus to the upcoming earnings season,” said Jeremy Klein, chief market strategist at FBN Securities, in a note Monday.