By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Greece worries resurface for investors; China rate cut brushed
aside
U.S. stocks were trading lower on Monday, with the main indexes
falling as investors look set to cash in on some of last week's
healthy gains.
Trading has been choppy in morning trading with the S&P
500(SPX) switching between small gains and losses. By mid
afternoon, the benchmark index was down 6 points, or 0.3%, at
2,1109.60. Nearly all of the 10 main sector were trading lower with
the energy sector leading losses.
The Dow Jones Industrial Average (DJI) was 69 points lower, or
down 0.4%, at 18,123.68. The Nasdaq Composite (RIXF) was switching
between gains and losses and was marginally higher in late
afternoon trading at 5,006.34.
Jim Dunigan, market strategists at PNC Wealth Management, said
it wasn't surprising to see the market pause after a strong rally
on Friday.
"The jobs report showed the economy is growing strongly enough
to make a September rate hike likely, though we still have to get
past June," Dunigan said.
Friday's jobs report supported the view that the U.S. economy is
on solid footing, but the data may not be strong enough to move up
the timing of the first rate hike by the Federal Reserve in nearly
a decade, said analysts. That "Goldilocks" report triggered the
biggest one-day point gain for the Dow industrials (DJI) in more
than a week. Friday's gains
(http://www.marketwatch.com/story/us-stocks-a-cautious-move-higher-as-big-jobs-data-looms-2015-05-08)
helped both the Dow and the S&P 500 finish a turbulent week
modestly higher.
Read: "Earnings recession" on hold as quarter shows fractional
gain
(http://www.marketwatch.com/story/earnings-recession-on-hold-as-quarter-showing-fractional-gain-2015-05-10)
(http://www.marketwatch.com/story/earnings-recession-on-hold-as-quarter-showing-fractional-gain-2015-05-10)
(http://www.marketwatch.com/story/earnings-recession-on-hold-as-quarter-showing-fractional-gain-2015-05-10)"At
the same time, earnings were not as dire as forecast and are likely
to rebound later this year," Dunigan said.
"Ultimately, an increase in Fed funds rate is a positive thing,
even though we might have a market tantrum, because it means the
economy is improving," he added.
Earlier in trading Monday, stocks were struggling to follow
Friday's gains. Craig Erlam, senior market analyst at OANDA, said
some investors will be cashing in as the S&P 500 trades near
all-time highs, especially as there is little reason for levels to
be broken right now.
"The U.S. has just been through a very difficult first quarter,
and the Fed is contemplating raising rates. Neither of these are
consistent with equity markets breaking into uncharted territory,"
he said in a note.
Another factor weighing on futures was Greece's bailout talks,
which are taking place in Brussels Monday. Little progress is
expected, as Greece's 750-million-euro ($837 million) loan
repayment to the International Monetary Fund due Tuesday looms.
Greece's Athex Composite index was down nearly 3%.
Read: 'Groundhog week for Greece'--analysts downbeat on
Eurogroup outcome
(http://www.marketwatch.com/story/groundhog-week-for-greece-analysts-downbeat-on-eurogroup-outcome-2015-05-11)
No boost from China: The People's Bank of China on Sunday cut
its benchmark lending and deposit rates by a quarter of a
percentage point
(http://www.marketwatch.com/story/china-cuts-rates-as-economic-slowdown-deepens-2015-05-10)
(http://www.marketwatch.com/story/china-cuts-rates-as-economic-slowdown-deepens-2015-05-10),
but neither the U.S. nor Europe markets seemed to get much benefit
from the signs of more stimulus.
The third rate cut in six months is "creating fears that Chinese
growth will have to be manufactured by policy changes rather than
built on more-robust growth foundations, limiting the feel-good
factor for Western markets", said Rebecca O'Keeffe, head of
investment at brokerage firm Interactive Investor, in a note.
Read: Don't buy into this jobs-fueled rally, market timer warns
(http://www.marketwatch.com/story/dont-buy-into-this-jobs-fueled-rally-market-timer-warns-2015-05-08)
(http://www.marketwatch.com/story/dont-buy-into-this-jobs-fueled-rally-market-timer-warns-2015-05-08)Earnings
season is doing a slow wind-down, with only 14 S&P 500
companies due to report this week. Dish Network Corp. (DISH) said
it lost subscribers, but profit doubled
(http://www.marketwatch.com/story/dish-profit-doubles-but-still-losing-subscribers-2015-05-11).
Sotheby's(BID) profit and revenue topped forecasts
(http://www.marketwatch.com/story/sothebys-profit-revenue-tops-estimates-2015-05-11).
Dean Foods Co. (DF) posted quarterly results and an outlook that
beat expectations
(http://www.marketwatch.com/story/dean-foods-stock-surges-after-profit-sales-and-outlook-top-expectations-2015-05-11).
Baird raised the rating of both Joy Global Inc.(JOY) and
Caterpillar Inc. (CAT) to outperform from neutral, sending those
shares higher.
For more on today's notable movers read Movers & Shakers
column
(http://www.marketwatch.com/story/sothebys-dish-network-dean-foods-set-to-serve-up-quarterly-results-2015-05-11).
Other markets: Chinese stocks
(http://www.marketwatch.com/story/chinese-stocks-rally-as-pboc-cuts-interest-rates-again-2015-05-11)
rose for a second session on the heels of those rate cuts, with the
Shanghai Composite Index gaining 3%. The Nikkei 225 index rose
1.3%, to its best close since late April.
The dollar
(http://www.marketwatch.com/story/euro-lower-on-greek-fears-ahead-of-eu-ministers-meeting-2015-05-11)(DXY)
moved higher across the board, with the euro (EURUSD) dipping on
jitters about Greece. Gold prices (GCM5) were marginally lower,
while crude-oil prices
(http://www.marketwatch.com/story/crude-oil-futures-struggle-for-direction-after-us-jobs-data-supply-rise-2015-05-11)(CLM5)
reversed earlier gains and were slightly lower.
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