The S&P 500 slipped Monday, weighed down by a slide in energy, but the index remained near record highs following the stronger monthly jobs report Friday.
The S&P 500 was flat, and remained close to its all-time high of 4,440.82. The Dow Jones Industrial Average slipped 0.2%, or 81 points, and the Nasdaq was up 0.3%
Energy stocks fell 1% as oil prices deepened their losses following a slump last week as surging Covid-19 cases continued to muddy the outlook for energy demand.
“The [oil] price slide [from late Friday] is continuing today amid growing concerns about demand again [amid] rising coronavirus figures in Asia,” Commerzbank (DE:CBKG) said in a note. “[T]his could prompt the Chinese government to take drastic measures in line with its strict zero Covid strategy."
The U.S. reported a seven-day average of more than 108,600 new cases per day as of Sunday, up 36% from a week earlier, according to data from Johns Hopkins University.
Despite concerns over the delta-variant led surge in cases, the overall sentiment on the economy remains positive following last week’s better-than-expected jobs report.
“While some fear an impact from the Delta variant going forward, at least for now, businesses do not appear to be deterred from continuing to add employees and at least attempt to return to ‘normal," Stifel said in a note.
Treasury yields continued to rack up gains, with the 10-year continuing to trend above 1.3%. Wall Street is expecting more gains ahead for Treasury yields, “10y UST yields double-bottomed at 1.125% and will rise into year-end, led by US real rates decoupling from those in Europe,” Morgan Stanley (NYSE:MS) said. “Strong US data, back-to-school success, ‘advanced notice’ on Fed tapering, and progress on infrastructure make the US stand out.
”The backdrop of rising yields continued to support banking stocks and the broader financial sector.
Bank of America Corp (NYSE:BAC), Goldman Sachs Group Inc (NYSE:GS), and Citigroup Inc (NYSE:C) were up more than 1%. Higher interest rates boost the return on interest that banks earn from their loan products, or net interest margin – the difference between the interest income generated by banks and the amount of interest paid out to depositors.
As well as rising banking stocks, a gain in Berkshire Hathaway B (NYSE:BRKb) also supported financials after the conglomerate’s reported a 21.3% year-on-year climb in its second quarter operating income.
“Results were boosted in part by record profits at its railroad subsidiary BNSF Railway. Buybacks totaled about $6 billion and cash holdings stand at $144 billion at quarter end,” DA Davidson said.
Megacap tech stocks also kept gains in the broader market in check. Apart Google-parent Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT, Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB) and Amazon (NASDAQ:AMZN) were in the red.
In other news, Coinbase Global Inc (NASDAQ:COIN) jumped 8% supported by a rally in bitcoin ahead of cryptocurrency exchange’s quarterly results due Tuesday.