McDonalds – Midday Report: US Stocks Mixed Ahead of Big Technology Earnings While Treasuries Head Higher
US stocks were mixed on Monday while Treasuries advanced ahead of big technology earnings this week and as the Thanksgiving and holiday season surges in the COVID-19 case count wore off.
The Dow Jones Industrial Average dropped by 179.85 points, or 0.6%, to 30,817.47. S&P 500 was down by 0.3% to 3,830.37 and Nasdaq was down by 0.1% to 13,528.90. Both indexes were higher earlier in the session. Energy and financials were among the steepest decliners while the utilities sector was the biggest gainer.
The US 10-year yield declined by 5.1 basis points to 1.04%. The West Texas Intermediate futures were up by 0.1% to $52.27 after trading down earlier in the session.
Apple (AAPL) climbed by 2.3%, the most on the Dow, ahead of its fiscal first-quarter results due Wednesday. Investors are also awaiting earnings from Facebook (FB), also set for Wednesday, and blue-chip stocks including Dow (DOW) and McDonald’s (MCD), both due Thursday.
GameStop (GME) rose by 50% intraday as bullish traders on the social platform Reddit continued to work to drive the shares higher, according to a Bloomberg report. Short-seller Citron Research cited five reasons why the stock has to go back to $20. Moderna (MRNA) rose by 7.5% after studies showed its COVID-19 vaccine neutralized all key emerging variants tested, including the ones first identified in the UK and South Africa, and noted it was working on a booster for the South African strain.
The Johns Hopkins database reports 130,000 new cases Sunday, down 27% from a week ago, Pantheon Macroeconomics said Monday. The seven-day average fell by 32% from its peak on Jan. 8 and is now below its pre-Thanksgiving level. Test positivity also continued to fall rapidly, averaging an 11% decline over the past week.
“Much of the abrupt drop in cases in recent weeks represents the reversal of the Thanksgiving and holiday season surges,” Pantheon Chief Economist Ian Shepherdson said. “We doubt that the current level of restrictions is enough to keep cases falling towards zero, but over the next couple months it is reasonable to expect vaccination to start making a visible difference.”
The Federal Open Market Committee will be back in focus this week as the two-day meeting is set to conclude Wednesday.
“With just two weeks until the Trump impeachment trial gets underway, we are likely to see a major push to pass the stimulus package before everyone is sidetracked once again,” IG Group said. “As such, there is little chance of a major shift in policy from the Fed at this forthcoming meeting.”
Meanwhile, the Dallas Fed’s monthly manufacturing index fell to a reading of 7 in January from 10.5 in December. There were declines for production, new orders and employment and the reading for the company outlook fell to 10.3 from 18.2. The Chicago Fed’s monthly National Activity Index rose to a reading of 0.52 in December from 0.31 in November. The three-month moving average rose to 0.61 from 0.59.
In the precious metals markets, gold was down 0.1% to $1,854.30 an ounce, with silver down 0.4% to $25.45 an ounce and copper down 0.2% to $3.62 per pound.
Among energy ETFs, the United States Oil Fund rose 0.2% to $35.28 and the United States Natural Gas Fund was up 3.8% to $9.35. Among precious-metal funds, the Market Vectors Gold Miners ETF was down 0.5% to $35.10 and SPDR Gold Shares were up 0.1% to $174.10. The iShares Silver Trust was down 0.2% to $23.61.