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REUTERS: Wall Street’s major indexes fell after opening higher on Monday as a rally last week on easing inflation concerns petered out, with high-growth stocks leading lower.
“We had a nice rally last week, so I think we’re seeing a little profit taking this morning,” said Dennis Dick, a proprietary trader at Bright Trading LLC in Las Vegas.
“The stocks that rose the most last week are the ones that have been hit the hardest here today.”
The tech-heavy Nasdaq Composite Index, which gained 7.5% last week, fell 0.7% to lead the declines among the three major indexes.
Investors were betting on a pullback in oil prices from three-month highs reached in June to potentially ease inflationary pressures and likely push the Federal Reserve to moderate its aggressive policy tightening.
However, Monday’s data showed that new orders for U.S.-made capital goods and shipments rose sharply in May, indicating continued strength in business capital spending in the second quarter.
Oil prices also slipped back into positive territory, pushing the S&P 500 energy index up 2.2%, dampening expectations of lower inflation due to lower energy prices. .
The US central bank quickly raised interest rates to bring inflation, which has been high for 40 years, under control, stoking fears that its actions could tip the world’s largest economy into a recession.
After the benchmark S&P 500 index fell 20% from its January closing high earlier this month to confirm a bear market, investors tried to gauge when the market might bottom.
As of 10:11 a.m. ET, the Dow Jones Industrial Average was down 76.62 points, or 0.24%, at 31,424.06, the S&P 500 was down 13.94 points, or 0.36%, at 3,897.80 and the Nasdaq Composite was down 78.44 points, or 0.68%, at 11,529.19.
Shares of Robinhood Markets rose 0.6% after media reports that Goldman Sachs had moved the retail broker’s shares from “neutral” to “sell”.
Goldman Sachs, however, cut Coinbase Global Inc.’s rating to “sell” from “buy,” according to media reports, sending the cryptocurrency exchange’s shares down 9.4%.
Falling issues outnumbered advances by a 1.03-to-1 ratio on the NYSE and a 1.31-to-1 ratio on the Nasdaq.
The S&P index recorded a new 52-week high and 29 new lows, while the Nasdaq recorded 16 new highs and 41 new lows.