By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Greece worries resurface for investors; China rate cut brushed
aside
U.S. stocks ended Monday's thinly traded session slightly lower,
giving back some of the gains from Friday's post-jobs rally.
Trading activity on Wall Street was lower than usual, with the
total composite volume the fifth lowest this year, according to
FactSet.
The S&P 500(SPX) closed 10.77 points, or 0.5%, lower at
2,105.33, with all 10 main sectors posting losses. The energy
sector was hit the hardest, falling more than 2%.
The Dow Jones Industrial Average (DJI) shed 85.94 points, or
0.5%, to 18,105.17, with 24 of its 30 component finishing
lower.
The Nasdaq Composite (RIXF) ended the session off 9.98 points,
or 0.2% at 4,993.57.
Jim Dunigan, market strategist at PNC Wealth Management, said it
was no surprise to see the market pause after a strong rally on
Friday.
"The jobs report showed the economy is growing strongly enough
to make a September rate hike likely, though we still have to get
past June," Dunigan said.
Friday's jobs report supported the view that the U.S. economy is
on solid footing, but the data may not be strong enough to move up
the timing of the first rate hike by the Federal Reserve in nearly
a decade, said analysts.
Read: "Earnings recession" on hold as quarter shows fractional
gain
(http://www.marketwatch.com/story/earnings-recession-on-hold-as-quarter-showing-fractional-gain-2015-05-10)
"At the same time, earnings were not as dire as forecast and are
likely to rebound later this year," Dunigan said.
"Ultimately, an increase in Fed funds rate is a positive thing,
even though we might have a market tantrum, because it means the
economy is improving," he added.
Craig Erlam, senior market analyst at OANDA, said some investors
would be cashing in as the S&P 500 trades near all-time highs,
especially amid a lack of catalysts for a push to new highs.
"The U.S. has just been through a very difficult first quarter,
and the Fed is contemplating raising rates. Neither of these are
consistent with equity markets breaking into uncharted territory,"
he said in a note.
Another factor weighing on futures was Greece's bailout talks,
which continued Monday in Brussels with little progress. Greece's
Athex Composite index was down nearly 3%.
Read: 'Groundhog week for Greece'--analysts downbeat on
Eurogroup outcome
(http://www.marketwatch.com/story/groundhog-week-for-greece-analysts-downbeat-on-eurogroup-outcome-2015-05-11)
No boost from China: The People's Bank of China on Sunday cut
its benchmark lending and deposit rates by a quarter of a
percentage point
(http://www.marketwatch.com/story/china-cuts-rates-as-economic-slowdown-deepens-2015-05-10)
(http://www.marketwatch.com/story/china-cuts-rates-as-economic-slowdown-deepens-2015-05-10),
but neither the U.S. nor Europe markets seemed to get much benefit
from the signs of more stimulus.
The third rate cut in six months is "creating fears that Chinese
growth will have to be manufactured by policy changes rather than
built on more-robust growth foundations, limiting the feel-good
factor for Western markets", said Rebecca O'Keeffe, head of
investment at brokerage firm Interactive Investor, in a note.
Read: Don't buy into this jobs-fueled rally, market timer warns
(http://www.marketwatch.com/story/dont-buy-into-this-jobs-fueled-rally-market-timer-warns-2015-05-08)
Earnings season is doing a slow wind-down, with only 14 S&P
500 companies due to report this week. Dean Foods Co. (DF) shares
jumped 6.5% after the company posted quarterly results and an
outlook that beat expectations
(http://www.marketwatch.com/story/dean-foods-stock-surges-after-profit-sales-and-outlook-top-expectations-2015-05-11).
Dish Network Corp. (DISH) said it lost subscribers, but profit
doubled
(http://www.marketwatch.com/story/dish-profit-doubles-but-still-losing-subscribers-2015-05-11).
Shares gained 0.7%.
Sotheby's(BID) shares rose 1.4% after profit and revenue topped
forecasts
(http://www.marketwatch.com/story/sothebys-profit-revenue-tops-estimates-2015-05-11).
Baird raised the rating of both Joy Global Inc.(JOY) and
Caterpillar Inc. (CAT) to outperform from neutral, sending those
shares higher, up 5.2% and 1.7% respectively.
For more on today's notable movers read Movers & Shakers
column
(http://www.marketwatch.com/story/sothebys-dish-network-dean-foods-set-to-serve-up-quarterly-results-2015-05-11).
Other markets: Chinese stocks
(http://www.marketwatch.com/story/chinese-stocks-rally-as-pboc-cuts-interest-rates-again-2015-05-11)
rose for a second session on the heels of those rate cuts, with the
Shanghai Composite Index gaining 3%. The Nikkei 225 index rose
1.3%, to its best close since late April.
The dollar
(http://www.marketwatch.com/story/euro-lower-on-greek-fears-ahead-of-eu-ministers-meeting-2015-05-11)(DXY)
moved higher across the board, with the euro (EURUSD) dipping on
jitters about Greece. Gold prices
(http://www.marketwatch.com/story/gold-futures-settle-lower-as-the-dollar-gains-ground-2015-05-11)(GCM5)
settled 0.5% lower at $1,183. Crude-oil prices
(http://www.marketwatch.com/story/crude-oil-futures-struggle-for-direction-after-us-jobs-data-supply-rise-2015-05-11)(CLM5)
settled fractionally lower at $59.25 a barrel.
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