Choppy session ends with slight losses for Nasdaq, S&P 500 and Dow Jones

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The stock market experienced a rollercoaster on Monday, spending time on either side of the unchanged field. With earnings season starting to heat up, investors struggled to find direction, with the major averages eventually ending with slight losses.

The Nasdaq (COMP.IND) and Dow (DJI) both finished 0.1%. The S&P 500 (SP500) ended just below the flat line.

“Bulls are leaving the building,” Schwab’s Liz Ann Sonders tweeted, noting that AAII Sentiment bullish share “has dropped to 15.8%, lowest since September 1992.” That’s often seen as a contrarian indicator, though.

In another comment on economic outlook, Goldman Sachs says it now sees a 35% chance of a US recession in the next two years.

Turning to the bond market, yields saw upward pressure. The 10-year Treasury yield rose 5 basis points to 2.86% and the 2-year climbed 2 basis points to 2.47%.

“Recession risks are more limited in 2022 but rise significantly by mid-to-late 2023,” Citi said. “Equity markets have started pricing this in already, but we expect fallout to be felt mostly in 1H ’23.

The firm added: “A -10% hit to earnings and a two multiple turn lower on the SPX imply risk to 3650. Relative to previous recessions, we expect market response to be earlier on both the way in and out.”

Bank of America posted solid earnings before the bell. The stock was sluggish in early trading but built a gain of about 3% as the closing bell approaches.

Morgan Stanley says there are already worrying signs about this earnings season, especially with guidance.

Twitter jumped almost 8% and remains in focus as well, especially if Elon Musk has any more tweets about what his next move might be.

See the other stocks making big moves on the day.

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