Wall Street closed lower on Monday, pulled down by healthcare and industrial stocks. Investor sentiment remained cautious as concerns over escalating Middle East tensions, higher oil prices and rising Treasury yields, along with anticipation of a busy week of corporate earnings, kept risk appetite subdued. All of the three benchmark indexes ended in the red.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.6%, or 307.16 points, to close at 51,839.26. Twenty components of the 30-stock index ended in the negative territory, while 10 ended in the positive.
The tech-heavy Nasdaq Composite slid 12.17 points, or less than 0.1%, to close at 25,508.07.
The S&P 500 lost 14.41 points, or 0.2%, to close at 7,443.28. Eight of the 11 broad sectors of the benchmark index closed in the red. The Health Care Select Sector SPDR (XLV), the Materials Select Sector SPDR (XLB) and the Industrials Select Sector SPDR (XLI) declined 1.2%, 0.9% and 0.8%, respectively, while the Communication Services Select Sector SPDR (XLC) advanced 0.7%.
The fear gauge CBOE Volatility Index (VIX) decreased 0.6% to 18.65. A total of 15.5 billion shares were traded on Monday, lower than the last 20-session average of 19.9 billion. Decliners outnumbered advancers by a 1.72-to-1 ratio on the NYSE and by a 1.8-to-1 ratio on the Nasdaq.
Rising Oil Prices and Middle East Tensions Keep Investors on Edge
Wall Street closed lower on Monday, as investors remained cautious amid escalating Middle East tensions and volatile oil prices. Brent crude climbed above $89 a barrel after the U.S. continued strikes on Iran and Yemen’s Houthis announced a naval blockade against Saudi Arabia, raising concerns over global energy supplies. Although reports of a possible 10-day ceasefire proposal offered some hope, uncertainty over the conflict and its economic impact kept risk appetite subdued throughout the trading session.
Healthcare and Industrials Drag Wall Street Lower
Weakness in healthcare and industrial stocks dampened investor sentiment on Monday. Selling pressure in the two economically sensitive sectors overshadowed gains in energy shares, reflecting growing caution ahead of a busy week of corporate earnings and lingering uncertainty surrounding Middle East tensions. Investors also remained wary of higher Treasury yields and their potential impact on corporate profits, prompting a broader risk-off mood that weighed on the major U.S. stock indexes.
Consequently, Caterpillar Inc. CAT and West Pharmaceutical Services, Inc. WST slid 1.8% and 1.7%, respectively. While CAT carries a Zacks Rank #3 (Hold), WST has a #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
