Stocks moved lower on Wall Street in afternoon trading Monday as the market gave back some of its gains after reaching new highs last week.
Investors started the week with a cautious approach and are keeping a close watch on the Federal Reserve’s policy meeting this week, along with trade negotiations and corporate earnings reports.
Amazon led a wide range of consumer-oriented companies lower. Facebook and Dish Network slid as part of a broad slump in communications stocks. Financial sector companies also fell as bond yields declined.
Gains in health-care companies partly offset some of those losses. The sector was mostly propped up by pharmaceutical companies ahead of some key earnings. It has held up better than the rest of the market in the early going.
Even with a busy week of corporate earnings on deck this week, Wall Street will be focused mainly on the outcome of the Fed’s meeting of policymakers. The market expects the central bank will cut its benchmark short-term rate on Wednesday to help ensure U.S. economic growth in the face of trade uncertainty. Investors are expecting the Fed will cut its rate by a quarter of a percentage point from its current range of 2.25% to 2.50%. That would be the Fed’s first rate cut in a decade.
Trade also remains on investors’ radar. The U.S. and China head into another round of trade negotiations on Tuesday. Wall Street is hoping the nations can avoid another escalation in tariffs like the one that occurred two months ago after talks fell apart.
Companies are just about halfway done with corporate earnings season and the slowdown in profit growth isn’t as severe as analysts initially forecast. There are still plenty of big companies reporting results, including Apple on Tuesday and General Motors on Thursday.
Investors are also awaiting the government’s monthly jobs report for July, which will be released on Friday.
KEEPING SCORE: The S&P 500 index fell 0.2% as of 1:49 p.m. Eastern time. The Dow Jones Industrial Average rose 59 points, or 0.2%, to 27,251. The Nasdaq composite fell 0.6% and the Russell 2000 index of smaller companies slid 0.7%.
Major stock indexes in Europe were mostly lower.
THE BIG PICTURE: A record run for stocks at the end of last week kept the broader market on track for another month of gains. The S&P 500 is up 2.7% in July and the Nasdaq is up 3.5%.
HEALTH DEALS: Pfizer slid 2% after the drug company said it will spin off one of its units, Upjohn, which will then combine with Mylan, which makes generic pharmaceuticals. Upjohn sells one-time blockbusters like Lipitor that have lost patent protection. Mylan soared 13.3%.
Cancer diagnostics company Exact Sciences fell 7.6% after announcing a cash and stock buyout of diagnostic test maker Genomic Health, which rose 3.9%.
SKID MARKS: Cooper Tire & Rubber fell 8.8% after falling far short of Wall Street’s second quarter financial forecasts because of a weak tire market in China and Europe. Higher tariff costs and a lingering weak tire market will continue to hurt the company in 2019 and it no longer expects volume growth.
UP IN ARMS: Booz Allen Hamilton rose 2.3% after the defense contractor’s fiscal first quarter profit and revenue beat Wall Street forecasts.