Stocks close lower as oil prices tumble to $43; Dow falls 78 points
The broad U.S. stock market, which ended last week at a record high, fell Monday as markets pulled back at the start of the week that features a big batch of corporate earnings results, a key meeting on interest rates and a barrage of fresh economic data.
The Dow Jones industrial average fell 78 points, or 0.4%, to 18,493. The broader Standard & Poor's 500 stock index -- which closed Friday at an all-time high of 2175.03 -- was 0.3% lower to 2168. The technology-stock dominated Nasdaq composite dropped 0.1% to 5098.
Energy stocks led the market lower as oil prices tumbled. U.S. benchmark crude fell $1.06, or 2.4%, to close at $43.13 a barrel.
Stocks are coming four straight weeks of gains that have been driven by a better-than-expected start to the second-quarter earnings season, continued signs that the U.S. economy is holding up following Britain's vote to exit the eurozone, and continued hopes among investors that central bankers from around the globe will continue to be supportive.
Central bankers in the U.S. and Japan meet this week on monetary policy. The U.S. Federal Reserve kicks off a two-day meeting Tuesday, and while the Janet Yellen-led Fed is not expected to hike interest rates this week, there is talk on Wall Street that a rate increase in September can't be ruled out as the economy gains strength. The Bank of Japan meets Friday, and Wall Street expects the BoJ to take additional steps to boost economic growth.
Federal Reserve wrestles with mixed economic signals this week
On the earnings front, nearly 200 companies in the S&P 500 are slated to release quarterly profit results this week, according to earnings tracker Thomson Reuters. With 26%, or 129, of the index components having already reported, 68% have topped expectations, which is better than the 63% beat rate going back to 1994. Currently, the large-company stock index is expected to suffer an earnings contraction of 3.7%, which Thomson Reuters says would mark the fourth straight quarter of negative growth.
Presidential politics will also be in the spotlight, as the Democratic National Convention kicks off today in Philadelphia. Democratic presumptive nominee Hillary Clinton will be officially anointed as the Democratic nominee for president. Clinton is slated to deliver a speech on Thursday, the final night of the convention.
In deal news, Verizon (VZ) made it official and announced that it is acquiring the core business of Yahoo (YHOO) for $4.8 billion in cash. The telecommunications giant will pair Yahoo with AOL, which it bought last May.
Verizon is winner in Yahoo sale with $4.8B bid
In economic news, on Friday Wall Street will get its first reading on economic growth in the second quarter, after disappointing 1.1% growth in the first three months of the year. While no economic releases are on tap for Monday, the data flow picks up Tuesday with the latest data on new home sales and consumer confidence. On Wednesday, June pending home sales and durable goods orders are set for release.
Stock markets in Asia were quiet, with the Nikkei 225 in Japan closing with a fractional loss and shares in Hong Kong edging up 0.1%. Equities in Europe were doing better, with the broad Stoxx Europe 600 index rising 0.2%.