NEW YORK: The Dow outpaced Wall Street peers on Monday, boosted by robust gains in Goldman Sachs, while rising Treasury yields following stronger-than-anticipated retail sales data kept gains in check.
Goldman Sachs gained 3.1% after its first-quarter profit beat Wall Street estimates, fueled by a recovery in underwriting, deals and bond trading that lifted its earnings per share to the highest since late 2021.
M&T Bank jumped 5.1% after forecasting better-than-expected annual net interest income (NII), while brokerage Charles Schwab added 3.1% despite reporting a fall in quarterly profit.
The stocks lifted the financial sector 0.4%, which was among top sectoral gainers.
US retail sales increased more than expected in March amid a surge in receipts at online retailers, further evidence that the economy ended the first quarter on solid ground.
“With the hot CPI we had last week, the economic evidence is pointing to a strong economy with inflation, and that does not play well with the revised thoughts of rate cuts,” said Andre Bakhos, managing member at Ingenium Analytics.
Yields across government bonds rose following the data, with the yield on the 10-year note rising to 4.624%, its highest level since November.
Rate-sensitive sectors such as real estate and utilities were amongst top loses across the major S&P 500 sectors.
Meanwhile, President Joe Biden warned Israeli Prime Minister Benjamin Netanyahu the United States would not participate in a counter-offensive against Iran.
Iran launched an attack after a suspected Israeli strike on its embassy compound in Syria on April 1 that killed top Revolutionary Guards commanders. However, Iran’s attack, launched using more than 300 missiles and drones, caused only modest damage in Israel.
US equities have sold off recently as investors sharply readjusted their expectations of how much the Fed would cut rates this year. Traders have priced in only 39 basis points of cuts this year, according to LSEG data, down from about 150 bps at the start of the year.
Meanwhile, the Wells Fargo Investment Institute raised its S&P 500 year-end 2024 forecast to 5,100-5,300 from 4,800-5,000.
At 11:26 a.m. ET, the Dow Jones Industrial Average was up 68.61 points, or 0.18%, at 38,051.85, the S&P 500 was up 3.82 points, or 0.07%, at 5,127.23, and the Nasdaq Composite was down 20.26 points, or 0.13%, at 16,154.84.
Apple fell 0.8% after data from research firm IDC showed the company’s smartphone shipments dropped about 10% in the first quarter of 2024.
Tesla will lay off more than 10% of its global workforce, an internal memo seen by Reuters showed. Shares of the EV maker were last down 3.0%.
Salesforce shed 5.5% after Reuters reported, citing a source, that the customer relations software maker was in advanced talks to acquire Informatica.
Declining issues outnumbered advancers for a 1.89-to-1 ratio on the NYSE for a 2.07-to-1 ratio on the Nasdaq.
The S&P index recorded five new 52-week highs and six new lows, while the Nasdaq recorded 25 new highs and 209 new lows.
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