Stocks were mostly higher Monday, with the S&P 500 and Nasdaq lifted by tech as Treasury yields pulled back, while the Dow Jones Industrial Average got dragged down by a slump for shares of Boeing.
What’s happening
-
The Dow
DJIA
fell 75 points, or 0.2%, to 37,391. -
The S&P 500
SPX
was up 26 points, or 0.6%, at 4,723. -
The Nasdaq Composite
COMP
gained 174 points, or 1.2%, to trade at 14,698.
On Friday, the Dow, S&P 500 and the Nasdaq Composite snapped a streak of nine straight weekly gains.
What’s driving markets
The Dow was under pressure as shares in Boeing
BA,
fell 6.8% after some of its 737 Max 9 planes were grounded following the blowout of a fuselage panel.
The Dow was off its session low and the S&P 500 and Nasdaq rose as Treasury yields pulled back, with the rate on the 10-year note
BX:TMUBMUSD10Y
sliding back below 4% after a New York Fed survey found U.S. one-year inflation expectations were at their lowest since January 2021.
Rate-sensitive sectors rose, with tech up 1.7%.
Read: NY Fed: It’s been years since consumers felt this good about where inflation could go next
Friday’s stronger-than-expected reading on the U.S. labor market coupled with a weaker-than-forecast survey of the services sector encapsulated the uncertainty over the trajectory of Fed policy. Inflation data due this week, including the December reading of the consumer-price index on Thursday and the producer-price index on Friday will be closely watched.
“This week’s inflation data could determine whether last week’s pullback is a blip on the radar or something larger,” said Chris Larkin, managing director for trading and investing at E-Trade from Morgan Stanley, in an email.
“The S&P 500 started the year with three straight down days for just the ninth time since 1991, and jobs data showed the labor market is still percolating,” he said.
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Speaking on Saturday, Dallas Fed President Lorie Logan said it was too early to take rate increases off the table as inflation remained above the 2% target and “a premature easing of financial conditions could allow demand to pick back up.”
Her peer Raphael Bostic, president of the Atlanta Fed, is due to make comments at noon Eastern. And on Thursday the December consumer prices index will be published, where economists expect headline annual inflation to be 3.3%, up from November’s 3.1%.
Indeed, recent comments from the central bank’s officials suggest they are trying to discourage the market from getting too hopeful that borrowing costs will be swiftly reduced this year.
Monetary policy will have some competition for investors’ attention on Friday when the fourth-quarter 2023 corporate earnings season kicks off, with big banks such as JPMorgan
JPM,
Citigroup
C,
and Wells Fargo
WFC,
leading the charge. Aggregate earnings for the S&P 500 are expected to rise 1.3%, according to FactSet.
Earnings Watch: This earnings season will be the first big test of the market’s year-end rally. The forecasts don’t look great.
Companies in focus
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Alaska Airlines said that it had canceled 170 flights — more than one-fifth of its schedule — by midafternoon Sunday on the West Coast because of the Boeing 737 groundings. Shares of Alaska Air Group Inc.
ALK,
-0.22%
were off 0.3%, trimming an earlier decline. Shares of fuselage maker Spirit AeroSystems Holdings
SPR,
-7.37%
were down more than 7%, but also off the session low. -
Harpoon Therapeutics’ stock
HARP,
+112.37%
rose 112% to $22.38 after Merck & Co.
MRK,
-0.57%
said it would buy the cancer-treatement developer, paying $23 in cash for each Harpoon share, representing a hefty premium over Harpoon’s $10.55 closing price on Friday.