US Stock Indexes Fall as Weak Tech Stocks Overshadow Market
“There have been a lot of dollars trafficking in these areas that have been winners the last year or so,” said Nate Thooft, senior portfolio manager at Manulife Asset Management. “As people get scared — as they see better opportunities elsewhere, or as they see someone else heading for the gates — it’s a bit of a self-fulfilling prophecy,” he said, where investors look to sell their tech stocks before everyone else does.
As investors moved out of tech stocks on Monday, some money flowed into areas of the market that haven’t done as well.
Energy stocks, which have been the worst performers in the S&P 500 this year, had the day’s strongest gains. Marathon Oil gained 3.1 percent, for example, and Noble Energy rose 2.7 percent.
They rose with the price of oil, which has been holding above $50 per barrel in recent days after spending most of the summer below that level. Benchmark U.S. crude rose $1.56 to settle at $52.22, and Brent crude, the international standard, jumped $2.16 to $59.02 a barrel.
Genuine Parts had the biggest gain in the S&P 500 after it said it would buy Alliance Automotive Group, a European distributor of auto parts, tools and workshop equipment. Genuine Parts valued the deal at $2 billion, including debt.
Genuine Parts gained $5.24, or 6 percent, to $93.22.
The stock market has been remarkably placid for much of this year, and the biggest move for the S&P 500 last week was a dip of just 0.3 percent. A few events are on the schedule for this week, though, which could make markets more active.
Federal Reserve Chair Janet Yellen will give a speech on inflation and monetary policy on Tuesday, one of several central bankers on the schedule for the week. Investors are also waiting to hear more details about President Donald Trump’s plans to cut taxes.
Investors were also keeping a close eye on tensions between North Korea and the U.S. On Monday, North Korea’s foreign minister said Trump’s threat over the weekend that leader Kim John Un may not be “around much longer” was a declaration of war.
Prices for Treasury bonds jumped after North Korea’s foreign minister made his comments. That in turn pushed down yields.
The yield on the 10-year Treasury note fell to 2.21 percent from 2.25 percent late Friday. The two-year fell to 1.41 percent from 1.44 percent, and the 30-year dipped to 2.76 percent from 2.78 percent.
The price of gold had been down in morning trading, but it quickly reversed course following the North Korean statement. It rose $14 to $1,311.50 per ounce.
Silver gained 16 cents to $17.15 per ounce, and copper lost a penny to $2.94 per pound.
Natural gas dropped 4 cents to $2.92 per 1,000 cubic feet, heating oil rose 4 cents to $1.86 per gallon and wholesale gasoline added 5 cents to $1.72 per gallon.
In overseas markets, Germany’s DAX index was virtually flat after Chancellor Angela Merkel won a fourth term. Merkel’s party and its allies, though, lost some seats as they turned in one of their weakest postwar results. The results sent the euro lower and underscored the challenge Merkel has in forming a coalition with new partners to lead Europe’s biggest economy.
The CAC 40 fell 0.3 percent in Paris, and the FTSE 100 dipped 0.1 percent in London.
In Asia, Japan’s Nikkei 225 rose 0.5 percent, South Korea’s Kospi slipped 0.3 percent and Hong Kong’s Hang Seng fell 1.4 percent.
The euro fell to $1.1846 from $1.1941 late Friday, and the British pound slipped to $1.3470 from $1.3527. The dollar fell to 111.61 Japanese yen from 112.05 yen.
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