Stocks on Monday lost steam late in the session and finished mixed after California Gov. Gavin Newsom ordered all dine-in restaurants, bars, movie theaters, museums and other indoor businesses across the state to again close as covid-19 cases continued to climb.
“We’re going back into modification mode of our original stay at home order,” Newsom said. “This continues to be a deadly disease.”
The S&P 500 briefly had turned positive for the year during the session but lost momentum during the afternoon.
The Dow Jones Industrial Average finished up 11 points, or 0.04%, to 26,086, the S&P 500 was down 0.93% and the tech-heavy Nasdaq was off 2.13% after touching an intraday high.
The Dow earlier received a boost from news that Pfizer (PFE) - Get Pfizer Inc. Report, in collaboration with Germany's BioNTech (BNTX) - Get BioNTech SE Sponsored ADR Report, was given "fast track" designation by the Food and Drug Administration for two of its coronavirus vaccine candidates.
Pfizer jumped 4.1% to $35.21 in trading Monday.
Second-quarter earnings won't be as bad as Wall Street expects, according to David Trainer, chief executive of New Constructs, an investment research firm in Nashville.
"Wall Street is expecting double-digit declines in second-quarter earnings amid the coronavirus-driven recession, but we believe companies are in much better shape than many analysts think," Trainer said. "That’s why the stock market rebounded so strongly from the March bottom.
"We think there is even more upside ahead as more investors realize earnings aren’t as bad as estimates suggest," he added.
According to FactSet, earnings for companies in the S&P 500 index are expected to fall 44.6% from a year earlier.
PepsiCo (PEP) - Get PepsiCo, Inc. Report kicked the season off Monday, reporting fiscal second-quarter core earnings of $1.32 a share, beating analysts' forecasts by 7 cents. Pepsi shares ticked up 0.3% to $134.91.
Earnings from big U.S. banks will be the highlight this week. JPMorgan Chase (JPM) - Get JPMorgan Chase & Co. (JPM) Report, Citigroup (C) - Get Citigroup Inc. Report, Wells Fargo (WFC) - Get Wells Fargo & Company Report, Bank of America (BAC) - Get Bank of America Corp Report, Goldman Sachs (GS) - Get Goldman Sachs Group, Inc. (GS) Report and Morgan Stanley (MS) - Get Morgan Stanley (MS) Report all will be issuing quarterly results.
"With banks up first, themes that emerged last quarter may likely be amplified - loan losses driving the downside, with increased trading revenue a potential bright spot," said Chris Larkin, managing director of trading at E-Trade.
Analog Devices (ADI) - Get Analog Devices, Inc. Report confirmed Monday it was buying rival semiconductor maker Maxim Integrated Products (MXIM) - Get Maxim Integrated Products, Inc. (MXIM) Report in a $21 billion all-stock deal. Maxim shares rose 8.1% to $69.29.
The merger creates a company with an enterprise value of about $68 billion.