NEW YORK: Wall Street fell on Monday as healthcare stocks slid and investors worried about rising costs for companies as oil prices rose, although the major indexes eked out a gain in April to snap a two-month losing streak.
The healthcare sector, which dropped 1.6 per cent, weighed most heavily on the S&P 500, as shares of Allergan plc and Celgene Corp led the sector’s slide.
Some investors suggested that on balance, a strong earnings season has not been enough for US stocks to break out of their recent trading range.
“The earnings are priced in,” said Robert Phipps, a director at Per Stirling Capital Management in Austin, Texas. “There’s not a whole lot of reason to buy. We’re stuck in the mud right now.”
Even as companies’ quarterly results have come in strong, their earnings calls have raised concerns that rising commodity prices may pinch profit margins in the future.
The possibility that temporary exemptions on steel and aluminum tariffs might expire for several US allies also weighed on US stocks. Without an extension from US President Donald Trump, the exemptions will expire on Tuesday.
“That might be the most negative (news event) this week,” said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco. “It’s not going to be viewed well by the market.”
The Dow Jones Industrial Average fell 148.04 points, or 0.61 per cent, to 24,163.15, the S&P 500 lost 21.86 points, or 0.82 per cent, to 2,648.05 and the Nasdaq Composite dropped 53.53 points, or 0.75 per cent, to 7,066.27.
LONDON: British shares traded higher on Monday as the planned merger between Sainsbury’s and Asda, the UK arm of Walmart, sent shockwaves through British retail stocks as investors sought to adjust to a potentially game-changing overhaul of the industry.
Britain’s FTSE was up 0.09 per cent at 7509.3 points, Germany’s DAX 30 was up 0.25 per cent, and France’s CAC 40 rose 0.68 per cent.
“Traders will be bracing themselves for volatility in the retail sector and particularly in Sainsbury when markets open this morning,” London Capital Group said in a research note.
“Given that shorting retailers has been a huge trade over the past two years, news of potential tie up between Sainsbury, the UK’s 2nd biggest supermarket and 7th most shorted stock, and Walmart subsidiary Asda could see many caught on the wrong side of the bet in early trade on Monday,” the broker explained.
Shorting a stock consists of borrowing a share, then selling it with the hope a buying it back later at a lower price and pocketing the difference.
TOKYO: Asian shares extended gains on Monday as tensions in the Korean Peninsula eased and first-quarter earnings shone, although some investors were cautious about the outlook amid the backdrop of a simmering US-China trade dispute.
MSCI’s broadest index of Asia-Pacific shares outside Japan climbed one per cent, adding to a similar rise on Friday. The index is now poised for a modest rise this month after two consecutive losses.
South Korea’s KOSPI index jumped 0.92 per cent and is set to end April more than 2.5 per cent higher following record profits from tech giant Samsung Electronics and after a spectacularly successful inter-Korean summit. Hong Kong’s Hang Seng index climbed 1.74 per cent,
Liquidity was low on Monday with Japan, China and India on holiday and much of Asia closed on Tuesday.
Overall, stocks continue to be supported by strong first quarter corporate earnings. More than half of Wall Street’s S&P 500 companies have reported and 79.4 per cent have beaten consensus estimates.
WELLINGTON: On Monday, New Zealand’s S&P/NZX 50 index rose 0.87 per cent, to 8,443.58.