Skip to main content

Stocks Finish Lower and Bond Yields Creep Higher

Stocks finish down as investors pause after a third straight week of gains for equities and as Wall Street prepares for first-quarter-earnings season.

Stocks on Monday finished lower as investors prepared for first-quarter-earnings season following a third straight week of gains for Wall Street and records for the Dow Jones Industrial Average and S&P 500.

The Dow ended down 55 points, or 0.16%, to 33,745, the S&P 500 fell 0.02% and the tech-heavy Nasdaq declined 0.36%. 

The Dow and S&P 500 had closed Friday at records.

Microsoft  (MSFT) - Get Microsoft Corporation Report finished little changed Monday after the software giant agreed to buy speech-recognition company Nuance Communications  (NUAN) - Get Nuance Communications Incorporated Report for $56 a share. The deal values Nuance at about $19.7 billion, including roughly $1 billion in Nuance debt.

Nuance shares finished up 16% at $52.85.

The yield on the 10-year U.S. Treasury note edged higher Monday to 1.682% after the U.S. Treasury sold three- and 10-year notes at slightly lower demand than previous sales. 

In an interview on CBS's "60 Minutes," Federal Reserve Chairman Jerome Powell said any increases in U.S. inflation would be temporary.

He said the central bank would consider raising interest rates when the nation was back to maximum employment and inflation was back to 2%:

"It'll be a while until we get to that place. But that's the guidance that we've offered to the public of the conditions we'd want to see before we start raising interest rates."

Scroll to Continue

TheStreet Recommends

Jim Cramer: When the Next Rate Hike Comes It's a Time to Buy Not Sell Stocks

Powell said Sunday that the U.S. economy was at a turning point as vaccines roll out, the government provides further fiscal stimulus and more Americans land jobs. But the nation isn't yet out of the woods.

"I would say this. What we're seeing now is really an economy that seems to be at an inflection point," the Fed chairman said.

Tom Mantione, managing director at UBS Private Wealth Management, said the main risk for stocks was "any sign of the Federal Reserve altering its message of accommodative monetary policy, which has been such an excellent tailwind for global markets. 

"If the Fed were to signal a desire to raise interest rates earlier, that could spark a moment of weakness for markets," Mantione said.

JPMorgan Chase  (JPM) - Get JP Morgan Chase & Co. Report will kick off the first-quarter earnings season Wednesday, followed by reports this week from Wall Street rivals Citigroup  (C) - Get Citigroup Inc. Report, Goldman Sachs  (GS) - Get Goldman Sachs Group Inc. (The) Report, Morgan Stanley  (MS) - Get Morgan Stanley Report, Wells Fargo  (WFC) - Get Wells Fargo & Company Report and Bank of America  (BAC) - Get Bank of America Corporation Report.

Rotation Is the Key Issue as Earnings Season Starts

Wells Fargo is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells the stock? Learn more now.

Meanwhile, officials from such companies as Alphabet  (GOOGL) - Get Alphabet Inc. Report, Intel  (INTC) - Get Intel Corporation Report and General Motors  (GM) - Get General Motors Company Report will meet with the White House Monday to discuss the impact a global semiconductor shortage is having on U.S. manufacturers.

Jim Cramer on the Semiconductor Shortage