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* Energy stocks hit as rising COVID-19 cases spark demand worry
* Sanderson Farms gains after $4.53 bln buyout offer
* Dow down 0.2%, S&P 500 down 0.05%, Nasdaq up 0.22% (Updates to mid-afternoon, changes byline)
NEW YORK, Aug 9 (Reuters) – The S&P 500 and Dow Industrials edged back from record levels on Monday, with financial shares advancing but energy down as rising COVID-19 cases led to worries about oil demand.
Energy shares slid 1.27%, the worst performing of the 11 major S&P sectors as crude prices fell as rising coronavirus cases and the restrictions, particularly in China, raised fears about the fuel demand outlook.
China reported more COVID-19 infections, while U.S. cases and hospitalizations were at a six-month high as the Delta variant spread.
Financial shares gained, buoyed by a climb in the 10-year U.S. Treasury yield back above the 1.30% level as a report on job openings showed further evidence an improving labor market.
“In general, of the economically sensitive cyclicals, it is the interest-rate sensitives that are going to celebrate this normalization of yields, even if normal is 1.30% versus where we were a week ago, which was 1.12%. That is driving the action,” said Art Hogan, chief market strategist at National Securities in New York.
Investors will watch U.S. inflation readings later this week for hints about the path of Federal Reserve policy. On Monday, Atlanta Fed president Raphael Bostic said the United States should be well past the pandemic crisis before the central bank raises rates. Richmond Fed President Tom Barkin said high inflation this year may have already met one of the Fed’s benchmarks for raising interest rates.
A meeting of Fed leaders in Jackson Hole, Wyoming, later this month, is expected to clarify the central bank’s potential plan to begin tapering its bond-purchase plan.
The Dow Jones Industrial Average fell 71.63 points, or 0.2%, to 35,136.88, the S&P 500 lost 2.29 points, or 0.05%, to 4,434.23 and the Nasdaq Composite added 32.30 points, or 0.22%, to 14,868.07.
A strong earnings season has helped U.S. stocks climb to record highs over the past two weeks, as several consensus-beating results from major firms reinforced belief in a post-COVID economic recovery.
As of Friday, analysts expected second-quarter profit growth of 93.1% for S&P 500 companies, according to IBES data from Refinitiv. Of the 443 companies in the index that have reported earnings so far, 87.4% beat analyst expectations, the highest on record.
Sanderson Farms Inc climbed 7.40% after it agreed to be bought for $4.53 billion by commodities trader Cargill Inc and investment firm Continental Grain Co at a time when meat prices have been soaring.
Tyson Foods Inc advanced 8.77% after the meat processing company raised its forecast for fiscal 2021 revenue.
Declining issues outnumbered advancing ones on the NYSE by a 1.32-to-1 ratio; on Nasdaq, a 1.09-to-1 ratio favored advancers.
The S&P 500 posted 26 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 73 new highs and 62 new lows. (Reporting by Chuck Mikolajczak; Editing by David Gregorio)