US stocks fell midday Monday, as investors awaited a closed earnings calendar loaded with reporting heavyweights in every sector.
The S&P 500 (^GSPC) was down 0.13%, while the Dow Jones Industrial Average (^DJI) was down 0.16%. The technology-heavy Nasdaq Composite (^IXIC) was down 0.82% at 12:00 PM ET.
Government bonds fell. The yield on the 10-year note fell to 3.519%, while the yield on interest rate-sensitive bonds fell to 4.169% Monday morning.
This week will bring in a flood of earnings including many big tech companies – Microsoft (MSFT), Meta (META), Amazon (AMZN) and Alphabet (GOOGL) – whose shares have pushed the S&P higher so far this year.
Wall Street was worried about the so-called earnings slump, as investors expect a decline in US corporate earnings for the second consecutive quarter. That has some strategists wondering whether this year’s market rally will run out of steam.
So far, earnings season is off to a strong start, with about 68% reporting an EPS outperformance so far, down from a record high of 90% last week, according to a note from Bank of America.
Big bank profits in the back view. But some regional lenders are still running, including First Republic Bank (FRC) which reported after the bell on Monday.
Meanwhile, Credit Suisse Group AG (CS) on Monday reported its latest quarterly results. Even after UBS (UBS) agreed to buy the troubled bank in March, depositors at Credit Suisse withdrew nearly $75 billion.
However, Wall Street remains concerned that the US economy will spiral into recession as the Federal Reserve raises interest rates to calm inflation. Investors will be closely watching the first reading of the first quarter GDP on Thursday. Economists expect a rise of 2.2%, compared to 2.6% in the fourth quarter of 2022.
“It’s getting increasingly difficult to find an economic indicator that says the economy isn’t really in a recession right now, let alone that it’s about to,” the Bespoke Investment Group wrote in an April 21 note.
Other economic data this week includes Consumer Confidence, New Home Sales, Durable Goods Orders and the closely watched Employment Cost Index. This will be the last big inflationary data point before the FOMC meeting next week.
Separately, after the volatility in energy markets this year, Wall Street’s attention will turn to some of the biggest players by the end of next week in oil, including Exxon (XOM), Chevron (CVX), Valero (VLO) and TotalEnergies SE. (TTE).
After four consecutive weeks of gains, Crude Oil retreated as last week’s data showed growing headwinds for the US economy. WTI fell 5.63% for the week, while Brent broke a winning streak to end down 5.39% for the week.
In single stock movements, Bed Bath & Beyond Inc. (BBBY) filed for bankruptcy. The home goods seller and former stock meme lover just couldn’t raise enough money to stay afloat.
Shares of Coca-Cola (KO) rose after the beverage company reported that global sales for the first quarter increased 5% in the first three months of the year to $10.98 billion, beating analyst expectations of $10.8 billion.
Fox Corporation (FOXA) sank nearly 5% after the network said Monday that its co-host, Tucker Carlson, had “agreed to separate.”
Overall, the narrative that we are entering a recession is “very tempting,” Michael Antonelli, managing director and market strategist at Baird, told Yahoo Finance Live. But, he noted, “companies are still doing well.”
Shares of Koninklijke Philips NV (PHIA.AS) rose after Dutch health technology company Royal Philips announced that it had set aside funds to cover potential litigation costs in the United States related to the recall of 5.5 million defective medical devices.
Shares of Sociedad Química y Minera de Chile SA (SQM) jumped after Chilean President Gabriel Boric announced on Friday a new, state-led strategy to develop its vast lithium resources, which is vital to the development of electric vehicles.
Danny Romero, Yahoo Finance correspondent. Follow her on Twitter @tweet
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