(RTTNews) – Stocks showed a strong uptrend in early trading on Monday, but saw a substantial decline during the session. The major averages have moved well away from their early highs and into negative territory.
After jumping more than 350 points at the start of the session, the Dow fell 215.65 points or 0.7% to 31,072.61. The Nasdaq also fell 92.37 points or 0.8% to 11,360.05, while the S&P 500 slipped 32.31 points or 0.8% to 3,830.85.
Initial strength on Wall Street came as traders continued to buy stocks at relatively reduced levels after the rally seen last Friday halted a recent downtrend.
Positive sentiment was also generated in reaction to upbeat earnings news from Goldman Sachs (GS), as the financial giant jumped 2.5%.
Goldman Sachs’ advance came after the company announced second-quarter results that beat analysts’ estimates for both revenue and profit.
Shares of Bank of America (BAC) also edged higher, even as the financial giant reported weaker-than-expected second-quarter earnings.
However, buyer interest waned during the session as traders continued to worry about the economic outlook ahead of next week’s Federal Reserve meeting.
Traders may also have been reluctant to make significant bets ahead of the release of earnings information from a slew of major companies later this week.
In US economic news, the National Association of Home Builders released a report showing a substantial deterioration in US homebuilder confidence in the month of July.
The report showed the NAHB/Wells Fargo housing market index dipped to 55 in July from 67 in June. Economists expected the index to drop to 66.
The HMI recorded its second biggest one-month drop after a 42-point drop in April 2020, falling to its lowest level since May 2020.
Healthcare stocks came under pressure during the session, dragging the Dow Jones US Health Care Index down 2.2%.
Significant weakness also emerged among biotechnology stocks, as evidenced by the 2.1% drop in the NYSE Arca Biotechnology Index.
Pharmaceutical, utilities and network stocks also fell notably over the course of the day, contributing to the slowdown in broader markets.
In contrast, energy stocks held up strong gains amid a sharp rise in the price of crude oil. Crude for August delivery climbed $5.01 to $102.60 a barrel amid renewed supply jitters.
Reflecting the strength of the energy sector, the Philadelphia Oil Service Index jumped 3.6%, the NYSE Arca Oil Index jumped 2.4% and the NYSE Arca Natural Gas Index jumped 1.7%.
In overseas trade, stock markets in the Asia-Pacific region were mostly higher on Monday, with Japanese markets closed for a public holiday. China’s Shanghai Composite Index jumped 1.6%, while Hong Kong’s Hang Seng Index jumped 2.7%.
Major European markets also traded higher on the day. While Germany’s DAX index climbed 0.7%, Britain’s FTSE 100 index and France’s CAC 40 index both rose 0.9%.
In the bond market, Treasuries climbed from their worst levels of the day but remained in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite to its price, rose 3 basis points to 2.960% after hitting a high of 3.019%.
Reaction to the latest earnings news could boost trade on Tuesday, with tech giant IBM Corp. (IBM) among companies reporting quarterly results after the close of trading today.
Halliburton (HAL), Hasbro (HAS), Johnson & Johnson (JNJ) and Lockheed Martin (LMT) are also among the companies due to release their quarterly results before trading begins on Tuesday.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.