By Anora Mahmudova and Carla Mozee, MarketWatch
NEW YORK (MarketWatch) -- The U.S. stock market fell on Monday,
with the tech and small companies leading the losses. The main
benchmarks retreated from record levels reached Thursday, as
investors gear up for the second-quarter earnings season.
The S&P 500 (SPX) was 9 points, or 0.5%, lower at 1,976.10,
with only the defensive sectors, such as utilities and telecoms,
trading higher.
The Dow Jones Industrial Average (DJI) fell 66 points, or 0.4%,
to 17,001.47. The Nasdaq Composite (RIXF), the only one of the
three that didn't close at a record on Thursday, was down 31
points, or 0.7%, to 4,454.28.
The Russell 2000 (RUT) underperformed other benchmarks, falling
16 points, or 1.4%, to 1,191.42.
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action.
Kristina Hooper, U.S. investment strategist at Allianz Global
Investors, said that markets should not be overreacting to last
week's jobs numbers, as it's likely that it will be inflation that
will push the Fed to raise interest rates.
"Investors are digesting and rereading the jobs report, hence we
are saying markets pausing after record levels. Still, we think
markets are too liberal in expecting rate hikes in the second half
of 2015 and will be surprised if it happens sooner," Hooper
said.
Investors are easing back from their three-day July 4th weekend
without confronting major economic data or assessing speeches from
Federal Reserve members. The market did see fireworks Thursday
after the June U.S. jobs report surpassed expectations.
The new earnings season begins Tuesday with results from
aluminum producer Alcoa Inc. (AA), with another highlight coming
from Wells Fargo & Co. (WFC) on Friday.
Earnings for the S&P 500 are expected to rise by 4.9% for
the quarter, according to FactSet, and with stock prices extending
their reach to new highs, investors are likely to be less forgiving
if companies miss Wall Street's expectations. Analysts have reduced
their earnings estimates by the lowest amount since the second
quarter of 2011, said John Butters, senior earnings analyst at
FactSet.
Among individual companies, American Apparel Inc. (APP) jumped
after The Wall Street Journal reported the retailer is in talks to
raise new financing following the ouster of CEO Dov Charney.
NQ Mobile Inc.(NQ) shares continued to slide following news last
week that the chairman of the company's audit committee had stepped
down.
King Digital Entertainment (KING) shares climbed solidly above
their $22.50 IPO price, after briefly doing so last week for the
first time since the March IPO flop. For more stock movers, read
Movers and Shakers column.
In the commodities market, crude for August delivery (CLQ4) fell
75 cents to $103.31 a barrel, and gold futures(GCQ4) fell more than
$4 an ounce to $1,316.1 an ounce.
Asian stocks closed mostly lower, with Japan's Nikkei Average
down 0.4%, and European stocks fell after an unexpected and steep
drop in German industrial production raises worries about
growth.
The dollar (DXY) extended gains into a fourth consecutive day,
with traders considering whether the U.S. jobs report for June adds
more pressure on the Fed to raise interest rates sooner than
later.
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