NEW YORK — Stocks turned lower in afternoon trading on Monday, as investors looked ahead to this week's deluge of company earnings and remained concerned about the economic damage from a rise in coronavirus cases in some countries.
The S&P 500 was down 0.4% as of 12:18 p.m. Eastern after being up 0.4% earlier. The Nasdaq composite fell 0.2% and the Dow Jones Industrial Average was down 208 points, or 0.7%, at 30,788, mostly due to financial companies like Goldman Sachs and American Express.
The yield on the 10-year Treasury fell to 1.04% from 1.07% late Friday.
Several big companies will report their results this week, including technology titan Apple. The iPhone maker will report its results on Wednesday after the closing bell. Others reporting this week include American Express, Johnson & Johnson, 3M and AT&T.
“We’ve had a sprint higher for about four weeks now and there’s a lot coming this week,” said Brad Peterson, national portfolio advisor at Northern Trust Wealth Management. “Today's action is probably just a pause.”
Wall Street is waiting to see how negotiations start on President Joe Biden's $1.9 trillion stimulus proposal, while also facing a flood of corporate earnings reports and the latest comments from the Federal Reserve.
Investors are also weighing evidence of the economic damage of current coronavirus restrictions against hopes that once the pandemic comes under some control, economies will bounce back.
“Vaccine breakthroughs make it likely that life will become more functional again at some point in 2021, resulting in higher GDP growth and more robust corporate earnings,” Stephen Innes, chief global markets strategist at Axi, said in a report.
However, increasing global infections and new variants of the virus, along with "tightening social distancing restrictions and delays in vaccine rollouts in some places, all increase the near-term growth risks,” he said.
Markets have been mostly rallying recently on hopes that COVID-19 vaccines will lead to a powerful economic recovery later this year as daily life gets closer to normal. Hopes are also high that Washington will deliver another dose of stimulus for the economy now that the White House and both houses of Congress are under single control of the Democrats.
President Joe Biden has proposed a $1.9 trillion plan to send $1,400 to most Americans and deliver other support for the economy. But his party holds only the slimmest possible majority in the Senate, raising doubts about how much can be approved. Several Republicans have already voiced opposition to parts of the plan.
The coronavirus pandemic is also worsening and doing more damage to the economy by the day. A UN agency said Monday that four times as many jobs were lost last year as in 2009, during the global financial crisis.
GameStop, the video-game retailer that’s struggling to return to profitability, went on another wild ride, trading in a giant range between a low of $61.13 and a high of $159.18 in heavy trading. The stock was halted several times for volatility.
Some high-profile investors have been saying its stock price was too high and placed bets to profit from an eventual drop by “shorting” it, or borrowing shares of GameStop and selling them. But as the shares keep rising, these investors are forced to get out of their bets by buying the stock, pushing the price up further. In late morning trading it was up 25% at $82. It was trading at $17 at the beginning of the year.
In European stock markets, Germany’s DAX fell 1.7%, and France’s CAC 40 slipped 1.6%. The FTSE 100 in London dipped 0.8%.
Ken Sweet And Damian J. Troise, The Associated Press