By Anora Mahmudova and Wallace Witkowski, MarketWatch
Verizon to buy Yahoo in $4.8 billion deal
U.S. stocks retreated from record levels Monday, paring earlier
session losses, as investors turned cautious ahead of a busy week
of earnings and central bank meetings.
A drop in oil prices weighed on sentiment, hitting energy
companies once again, with the sector selling off 2.1%.
The S&P 500 fell 8 points, or 0.4%, to 2,167, with all
sectors trading lower except consumer discretionary, which was up
fractionally. Earlier, the index had been off by as many as 13
points.
The Dow Jones Industrial Average declined 88 points, or 0.5%, to
18,483, bouncing back from a 118-point deficit. Chevron Corp.(CVX),
Exxon Mobil Corp.(XOM) and General Electric Co.(GE) led the
losses.
Meanwhile the Nasdaq Composite Index shed 5 points, or 0.1%, to
5,095. Earlier in the session, the index had been down nearly 18
points.
Last week's move to all-time highs by the S&P 500 and the
Dow "suggests investors are not worried about the impact of the
Brexit vote," said Maris Ogg, president at Tower Bridge Advisors,
referring to the June 23 U.K. vote to leave European Union that
initially shocked financial markets.
Ogg cautioned not to read too much into the levels because
trading volumes are generally low.
"People assume not much will happen, as the Federal Reserve is
likely to keep rates on hold until after the election," Ogg
said.
The Federal Reserve kicks off its monetary policy meeting on
Tuesday and will announce its decision on Wednesday at 2 p.m.
Eastern time. The central bank is widely expected to hold interest
rates steady and stop short of signaling a possible rate increase
in September because of continued uncertainty about the economic
outlook.
Read:What to expect in the Fed statement this week
(http://www.marketwatch.com/story/what-to-expect-in-the-fed-statement-next-week-2016-07-22)
The Bank of Japan's rate decision is due on Friday local time
and will be closely watched for any hints of more easing in the
face of a stronger yen post Brexit and a slowdown in the economy.
In total, 15 central banks are scheduled
(http://www.marketwatch.com/story/wall-street-braces-for-feeding-frenzy-of-earnings-central-bank-action-2016-07-23)
to meet this week.
Some technical analysts pointed out that the rapid advance may
find obstacles ahead.
"While the SPX has finally broken out, we can't expect the
seemingly unobstructed advance to continue with nary a hiccup. Yes,
it has been impressive, and breadth is still undeniably strong. But
at some point momentum will slow, and the market must prove it can
hold its own, despite operating in a new stratosphere (above
2,135)," wrote Frank Cappelleri, technical analyst at Instinet
LLC.
See:Here's why one bull thinks the S&P 500 can rally to
2,400
(http://www.marketwatch.com/story/heres-why-one-bull-thinks-the-sp-500-can-rally-to-2400-2016-07-22)
Earnings: In earnings, however, Monday is a busy day. Sprint
Corp.(S) jumped 24% after the telecommunications company reported
fiscal first-quarter revenue that beat expectations
(http://www.marketwatch.com/story/sprints-stock-rallies-after-revenue-beat-net-phone-customer-additions-2016-07-25).
Shares of Micron Technology Inc.(MU) were up 6.4% after adopting
a shareholder rights plan late on Friday.
Kimberly-Clark Corp.(KMB) fell 1.8% even as the
consumer-products company reported earnings avenue ahead of Wall
Street expectations
(http://www.marketwatch.com/story/kimberly-clark-reports-better-than-expected-q2-earnings-revenue-2016-07-25).
Gilead Sciences Inc.(GILD) and Express Scripts Holding Co.(ESRX)
are slated to report after the market closes.
Movers and shakers:Verizon Communications Inc.(VZ) slipped 0.5%
after confirming it has agreed to buy Yahoo Inc. for $4.83 billion
(http://www.marketwatch.com/story/verizon-agrees-to-48-billion-deal-to-buy-yahoo-2016-07-24).
Shares of Yahoo(YHOO) dropped 2.8% lower after being halted earlier
in the morning news.
Read:Wall Street braces for feeding frenzy of earnings, central
bank meetings
(http://www.marketwatch.com/story/wall-street-braces-for-feeding-frenzy-of-earnings-central-bank-action-2016-07-23)
(http://www.marketwatch.com/story/wall-street-braces-for-feeding-frenzy-of-earnings-central-bank-action-2016-07-23)Amazon.com
Inc.(AMZN) was off by 0.8% after Wedbush Securities lifted the
price target on the stock to $835 from $775.
Other markets: Stocks in Asia closed mostly higher
(http://www.marketwatch.com/story/hong-kong-stocks-retreat-after-entering-bull-market-territory-2016-07-24),
while European markets also advanced for the most part
(http://www.marketwatch.com/story/european-stocks-climb-for-first-day-in-three-as-ryanair-ericsson-advance-2016-07-25).
The dollar dropped against most rival currencies
(http://www.marketwatch.com/story/dollar-steadies-as-investors-wait-for-fed-bank-of-japan-meetings-2016-07-25),
with the ICE Dollar Index down 0.2% at 97.26. Oil futures dropped
while gold settled down 0.3%
(http://www.marketwatch.com/story/gold-weakens-as-expectations-for-rate-rise-grow-2016-07-25)
at $1,319.50 an ounce as most other metals declined.
--Sara Sjolin in London contributed to this report.
(END) Dow Jones Newswires
July 25, 2016 14:23 ET (18:23 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.