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Stocks slide to start out August after best month since 2020

NY — Stocks on Wall Street quit early gains and closed slightly lower Monday as investors began another busy week of company earnings and economic reports.

The S&P 500 quit an early on gain to get rid of down 0.3%. The Dow Jones Industrial Average dipped 0.1% and the Nasdaq fell 0.2%. Smaller company stocks also gave back a few of their recent gains, nudging the Russell 2000 0.1% lower.

Bond yields mostly fell. The yield on the 10-year Treasury, which influences mortgage rates, fell to 2.60% from 2.65% late Friday.

Augusts subdued opening follows a good rally for stocks last month: July was the very best month for the S&P 500 index since November 2020. But this week’s selection of economic reports and company earnings has left traders just a little cautious, said Lindsey Bell, chief markets and money strategist at Ally Invest.

“Investors remain assessing where we break from here further to the upside or reverse course, Bell said.

The benchmark S&P 500 index fell 11.66 points to 4,118.63. It’s coming off a 9.1% gain in July, but remains down 13.6% for the entire year.

The Dow lost 46.73 points to close at 32,798.40, as the Nasdaq slid 21.71 points to 12,368.98. The Russell 2000 ended down 1.92 points at 1,883.31.

Banks, healthcare companies and tech stocks were on the list of biggest weights on the S&P 500. JPMorgan Chase fell 1%, UnitedHealth Group dropped 1.3% and Intuit slid 1.7%.

U.S. crude oil prices fell 4.8%, dragging energy stocks lower. Exxon Mobil lost 2.5%.

Those losses outweighed solid gains by retailers and consumer products makers. Target rose 1.3% and Procter & Gamble rose 2.9%.

Boeing jumped 6.1% for the largest gain in the S&P 500 after it cleared an integral hurdle with federal regulators and may soon resume deliveries of its large 787 airliner.

Stocks have already been falling for a lot of the entire year as investors be worried about high inflation and rising interest levels. An integral concern remains whether central banks will raise interest levels too aggressively and push economies right into a recession.

The Federal Reserve raised its key short-term interest by 0.75 percentage points on Wednesday, lifting it to the best level since 2018. The target is to slow the U.S. economy to greatly help temper the impact from inflation. An inflation gauge that’s closely tracked by the Fed jumped 6.8% in June from the year ago, the largest upsurge in four decades.

A surge in oil prices over summer and winter only worsened the impact from inflation. U.S. crude oil prices are up roughly 25% in 2022 and which has raised gasoline prices in the U.S. to record levels.

A written report the other day showed that the U.S. economy contracted last quarter and may maintain a recession. Stocks’ recent rally came as worrisome economic reports gave some investors confidence that the Fed can dial back its aggressive pace of rate hikes earlier than expected.

Several big companies are reporting earnings this week, that may give investors insight into how inflation is impacting businesses and consumers. Construction equipment maker Caterpillar and coffee chain Starbucks report earnings on Tuesday. Pharmacy chain CVS reports earnings on Wednesday.

Over fifty percent of the firms in the S&P 500 have reported their latest earnings results, which were mostly much better than expected. Many companies also have warned that inflation is hurting consumer spending and squeezing operations. Businesses have already been increasing prices in order to continue profits.

Wall Street may also get several updates face to face market, which includes remained strong. The Labor Department will release its June survey on job openings and labor turnover on Tuesday and its own closely-watched monthly employment report for July on Friday.

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