U.S. equities finished mixed on Monday in largely uneventful trading as traders await Congressional testimony by Federal Reserve chairman Janet Yellen later in the week. In the end, the Dow Jones Industrial Average lost a fraction, the S&P 500 gained 0.1%, the Nasdaq Composite gained 0.4% and the Russell 2000 lost 0.5%.
Treasury bonds were stronger, rebounding slightly from recent weakness. Elsewhere, the dollar was little changed; gold gained 0.3%; and oil gained 0.4% recovery from early weakness. Breadth was mixed and volume light, with just 82% of the NYSE’s 30-day average trading hands.
Technology stocks led the way on some buying activity in the “FAANGs” with Amazon.com, Inc. (NASDAQ:AMZN) up 1.8% to challenge the $1,000-a-share level — a threshold it’s been flirting with for three months. Yield-sensitive REITs were the laggards, down 0.9%.
Valeant Pharmaceuticals Intl Inc (NASDAQ:VRX) gained 2.7% on some balance sheet cleanup. Troubled teen retailer Abercrombie & Fitch Co. (NYSE:ANF) fell 21.1% after announcing it had terminated possible sale discussions. Dick’s Sporting Goods inc (NYSE:DKS) dropped 7.2% on a downgrade from Cleveland Research.
Best Buy Co Inc (NYSE:BBY) lost 6.3% on reports AMZN is building its own “Geek Squad” of service providers. And Sears Holdings Corp (NASDAQ:SHLD) fell 4.1% after announcing it would close 43 more stores and said some vendors are pulling support on fears of a cash crunch.
Conclusion
Investors have a lot to look forward too, with Yellen speaking on Wednesday and Thursday and Q2 earnings reporting season kicking off on Friday with a number of big banks, including Wells Fargo & Co. (NYSE:WFC). The bond market has been feeling the heat lately from the Fed’s hawkishness, with policymakers looking through weak “hard” economic data, uneven inflation, and evidence of a retrenchment by U.S. consumers to focus on extended asset price valuations and a compressed unemployment rate.
We’ll get an update on inflation on Friday when the June CPI number is released: Analysts are looking for the annual rate to remain unchanged at 1.7%, below the Fed’s 2.0% target.
On a technical note, breadth looks to be rolling over here with the percentage of S&P 500 stocks in uptrends hooking lower. This accompanied the three-month flat spot that started in March. A similar dynamic could, at the very least, see a retest of the broad market’s April lows.
Check out Serge Berger’s Trade of the Day for July 11.
Today’s Trading Landscape
To see a list of the companies reporting earnings today, click here.
For a list of this week’s economic reports due out, click here.
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Anthony Mirhaydari is founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. A two-week and four-week free trial offer has been extended to Investorplace readers.
