U.S. stocks slipped on Monday morning following a major rebound last week from this year’s steep declines. Wall Street is preparing to wrap up the worst first half for stocks in decades.
The Dow Jones Industrial Average lost 54 points, or 0.2%. The S&P 500 fell roughly 0.3%, and the Nasdaq Composite dropped 0.8%.
All of the major averages gave up earlier gains as investors continued to assess whether stocks have found a bottom, or are instead briefly rebounding from oversold conditions. Stocks could continue to get a lift in the near term this week, as investors rebalance their holdings for the end of the quarter.
The day’s moves have been “tepid,” Baird’s Ross Mayfield told CNBC, noting that there still isn’t a clear catalyst driving what has been an will continue to be a “meandering” market.
“In these kind of bear market rallies, it’s more about things getting a little too oversold, a little too negative. But those aren’t enough on their own to really sustain the rally, they just can provide relief in pockets.”
Cruise names dragged the market lower Monday. Royal Caribbean and Carnival fell more than 5% each, while Norwegian Cruise lost 4%.
Etsy was another top decliner, down 4.5% following a downgrade by Needham. Shares of Spirit Airlines fell more than 7% after the company said it would accept the latest takeover bid from Frontier Group.
The energy sector was a notable gainer, with Devon rising 5%. Valero, Enphase and Occidental were each up more than 4%.
BioNTech shares also advanced by about 4% after the drug maker said its Omicron-based Covid-19 booster generates an improved immune response against that variant.
Those moves followed a major comeback week that saw the Dow industrials jump more than 800 points, or 2.7%. The S&P 500 popped 3.1%, and the Nasdaq Composite surged 3.3%.
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Those gains helped the major averages post their first positive week since May. The Dow climbed 5.4% last week. The S&P 500 increased 6.5%, and the Nasdaq Composite gained 7.5%.
The S&P 500 is up more than 6% since hitting a bear-market low in mid-June, although the benchmark is still off 19% from its high and 18% since the year began.
The market volatility isn’t over yet, however, UBS equity strategist Christopher Swann said in a note Monday.
“The concerns that caused the index to fall into bear market territory earlier in June have not gone away—including worries over the pace of rate rises, the threat of recession, and political risks,” he said. “While the most probable single scenario, in our view, would feature an economic soft landing and market stabilization, sentiment is likely to remain fickle, and this is not a market to position for any one scenario with high conviction.”
Nike will report earnings for its fiscal fourth quarter after the bell Monday, ahead of a handful of other key reporters this week including Bed Bath & Beyond, General Mills, Constellation Brands and Walgreens.
—CNBC’s Michael Bloom contributed reporting.
