Stock Update: US Stocks Slip With 10-Year Yield, Manufacturing Sentiment at Six-Month Lows

Last Updated: Monday, August 2, 2021 5:19 PM | MT Newswires

US stocks slipped Monday, surrendering early gains, after a manufacturing sentiment index eased to a six-month low, causing the benchmark government bond yield to drop to its lowest closing level since early February.

The Dow Jones Industrial Average was 0.3% lower at 34,838.16 and the S&P 500 dropped 0.2% to 4,387.16, while the Nasdaq Composite gained less than 0.1% to 14,681.07.

Utilities fared best, with materials the weakest sector.

The Institute for Supply Management's US manufacturing index fell to 59.5 in July from 60.6 in June. That result also lagged expectations for 61 in a Bloomberg poll for the manufacturing gauge based on a managers survey. Despite the recent easing from historic highs, the indicator continues to signal a rapid expansion.

The 10-year US Treasury yield dropped to 1.18% from 1.24% Friday.

West Texas Intermediate crude also plunged, declining $2.53 to $71.42 per barrel.

An internal US Centers for Disease Control and Prevention document published late last week by The Washington Post urged the agency to acknowledge the risk of the highly contagious COVID-19 delta variant, rendering the diagnosis of "the war has changed" for pandemic containment efforts. Chinese authorities are reportedly rushing to control delta variant infections said to have spread to at least 14 provinces.

US construction spending rose 0.1% in June following a 0.2% decrease in May, as a 1.1% gain in private residential construction was offset by a 0.7% decline in private nonresidential construction and a 1.2% drop in public construction.

Single-family residential construction rose by 1.8%, while multi-family construction was down 0.1%. Remodeling spending rose 0.4%. Home building data for June released last month showed an increase in housing starts but a decline in building permits issued.

Second-quarter earnings growth has come in at 85%, beating estimates for an increase of 63%, a report from Business Insider said, citing data compiled by FactSet. With more than half the S&P 500 companies having already reported second-quarter earnings, 88% of those reporting have outpaced sales and profit expectations, according to the data.

On Monday, ON Semiconductor (ON) reported record second-quarter results that came in above expectations amid strong momentum in its automotive and industrial end markets,and set out an upbeat third-quarter outlook. Shares surged more than 12%.

Global Payments (GPN) also posted better-than-expected second-quarter results and raised its full-year 2021 outlook. Shares still dropped more than 11%.

In other company news, Parker-Hannifin (PH), a manufacturer of motion and control equipment for mobile, industrial and aerospace markets, agreed to acquire UK-based Meggitt in a deal worth 6.3 billion British pounds ($8.76 billion), according to a securities filing.

Tesla (TSLA) has cut the price of its Model 3 Standard Range version in China by 15,000 Chinese renminbi ($2,321), the electric car maker said via its account on the Chinese microblogging platform Weibo. The new starting price is 235,900 renminbi, after subsidies. The stock was among the top gainers on the S&P 500, rising 3.3%.

In the metals markets, gold was slightly higher at $1,816.70 per ounce, silver was down 0.3% to $25.47 an ounce and copper fell 1.2% to $4.42 per pound.

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