U.S. stocks fluctuated, after equities posted their best monthly gain in five, amid results from Tyson Foods Inc. and Frontier Communications Corp. while energy shares fell with oil.
Tyson Foods declined 9.5 percent after cutting its earnings forecast as higher cattle prices erode margins. Chevron Corp. sank 3.2 percent as energy companies in the Standard & Poor’s 500 Index lost 1.6 percent. Frontier Communications jumped 9.8 percent after raising its cash flow and capital spending outlooks. Southwest Airlines Co. rose 4.5 percent as oil retreated.
The S&P 500 fell 0.2 percent to 2,100.71 at 12:17 p.m. in New York, after earlier sliding to its average price during the past 100 days. The Dow Jones Industrial Average lost 81.61 points, or 0.5 percent, to 17,608.25. The Nasdaq Composite Index decreased less than 0.1 percent.
“China numbers were weak and I think there’s growing concern about the general overseas economic pictures and how that might affect the U.S. economy,” said John Carey, a Boston-based fund manager at Pioneer Investment Management, which oversees about $230 billion. “A lot of mixed signals and crosscurrents here.”
Commodities dropped after an official gauge of Chinese manufacturing slid to a five-month low and Iran said it will be able to bolster crude production within a week of sanctions ending.
Data Focus
A report earlier showed American households kept spending in June, capping a stronger quarterly performance for the biggest part of the economy. Incomes climbed 0.4 percent for a third month. Separate data showed The Institute for Supply Management’s index slipped last month from a June reading that was the fastest since the start of the year.
Focus will turn later this week to the monthly payroll report due Friday, as the Federal Reserve looks for signs of a further pickup in the labor market before raising interest rates. Fed Chair Janet Yellen said in July she expected the central bank to raise its benchmark rate this year, while emphasizing the pace of increases will probably be gradual.
“At this point the focus is largely falling on the Fed, so the macro becomes the dominant conversation in terms of will they or won’t they,” said Dan Greenhaus, chief global strategist in New York at BTIG LLC. “That’s really the conversation point through what is likely to be a slow month. Everyone’s going to be focusing on the economic data.”
Earnings Season
The S&P 500 rose 2 percent in July, as earnings from Amazon.com Inc. and Google Inc. countered declines by commodity companies. The gauge advanced 1.2 percent last week, and is 1.4 percent below an all-time high reached in May.
American International Group Inc. and Tenet Healthcare Corp. are among 16 S&P 500 members scheduled to post earnings today. More than two-thirds of companies in the benchmark have reported, with nearly three-quarters beating profit estimates and half exceeding sales projections. Analysts now forecast a 2.8 percent drop in second-quarter earnings, shallower than calls for a 6.4 percent fall about two weeks ago.
The Chicago Board Options Exchange Volatility Index rose 3 percent Monday to 12.50. The gauge, known as the VIX, on Friday posted its biggest monthly drop since February, down more than 33 percent.
Energy, Materials
Six of the S&P 500’s 10 main groups decreased today, led energy, industrial and raw-materials companies, while utility and health-care shares rose the most. The Bloomberg Commodities Index fell 1.2 percent, down for a third straight session to a 13-year low.
Consol Energy Inc. tumbled 6 percent, while Noble Energy Inc. and Chesapeake Energy Corp. dropped more than 2.7 percent. West Texas Intermediate crude reached its lowest since March.
Freeport-McMoRan Inc., Newmont Mining Corp. and Alcoa Inc. all declined for a third day, losing more than 1.9 percent amid the slide in commodities prices. Newmont was at its lowest since April 2001.
Shares of handbag makers Coach Inc. and Michael Kors Holdings Ltd. weighed on the consumer discretionary group, losing more than 3.5 percent, after analysts warned that slumping sales will probably continue. Hanesbrands Inc. dropped another 6.3 percent, after losing 9.1 percent Friday following disappointing results. It’s the stock’s worst two-day retreat in more than six years.
Apple 200-Day
Apple Inc. fell for the ninth time in 10 days to a more than three-week low. The shares slid below their 200-day moving average for the first time since September 2013.
Consumer staples advanced, despite Tyson Foods’ biggest drop in 15 months. Clorox Co. gained 2.5 percent to an all-time high after quarterly profit and revenue were above analysts’ estimates. Kraft Heinz Co. and Constellation Brands Inc. added at least 1 percent.
Utilities gained, led by NextEra Energy Inc., after their best month since October. NextEra jumped 2.7 percent to the highest since February after wind and solar power generator NextEra Energy Partners LP agreed to buy seven natural gas pipelines in Texas for $2.1 billion, adding sales of the power plant fuel to Mexico.
source: Bloomberg
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