Wall Street ends lower ahead of economic data and earnings

  • Big bank earnings, CPI data due later this week
  • US casino operators plummet as Macau closes casinos
  • Market-leading growth stocks bring down the Nasdaq
  • Indices down: Dow 0.52%, S&P 1.15%, Nasdaq 2.26%

NEW YORK, July 11 (Reuters) – U.S. stocks lost ground on Monday amid a lack of catalysts, market participants cautiously embarked on a week loaded with crucial inflation data and the unofficial start of the trading season. second quarter results.

The market’s top growth stocks dragged the three major U.S. equity indices into negative territory as risk sentiment was heightened by the closure of Macau’s first casino in more than two years to curb the spread of COVID-19. Read more

“It’s a jittery market,” said Rob Haworth, senior investment strategist at US Bank Wealth Management in Seattle. “It’s all about when earnings season kicks off and what the inflation (data) is telling us.”

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“We know inflation is fueled by supply constraints, and China is a big factor,” Haworth added. “And (Macau’s shutdown) threw a cold blanket over the market this morning.”

Earnings from major banks, including JPMorgan Chase & Co, Citigroup Inc and Wells Fargo & Co, are expected to kick off the second quarter reporting season later this week.

The S&P 500 Banking Index (.SPXBK) slipped 1.0%.

Analysts expect a sharp fall in year-on-year profits as companies increase their loan loss reserves, fueling fears of a looming recession. Read more

Later in the week, a slew of economic data – including consumer prices, retail sales and factory output – should provide insight into how far inflation has peaked and the economy cooled as the Federal Reserve edges closer to next week’s policy meeting, which is expected to result in the second consecutive 75 basis point interest rate hike.

“The market is trying to get on guard ahead of this (CPI) print,” Haworth said. “We hope for a slowdown, which would put the Federal Reserve in a more flexible position, but on the other hand, there are many reasons to believe that inflation could remain high and the Fed will remain aggressive.

The market is currently expecting the central bank to hike the fed funds futures rate by 75 basis points in its latest salvo against runaway inflation, a tactic that some say could tip an economy already in decline towards recession.

The Dow Jones Industrial Average (.DJI) fell 164.31 points, or 0.52%, to 31,173.84, the S&P 500 (.SPX) lost 44.95 points, or 1.15%, to 3,854.43 and the Nasdaq Composite (.IXIC) fell 262.71 points, or 2.26%, to 11,372.60.

Among the 11 major sectors of the S&P 500, Communication Services (.SPLRCL) suffered the largest percentage decline, while Utilities (.SPLRCU) led the gainers.

Before the big banks kick off the second-quarter earnings season in earnest on Thursday and Friday, results from PepsiCo and Delta Air Line (DAL.N) are due Tuesday and Wednesday, respectively.

On Friday, analysts saw S&P overall annual earnings growth of 5.7% for the April-June period, down from the 6.8% forecast at the start of the quarter, according to Refinitiv.

Twitter Inc (TWTR.N) fell 11.3% after Elon Musk said he was ending his deal to buy the social media company. Read more

Shares of US casino operators Las Vegas Sands (LVS.N), Wynn Resorts (WYNN.O) and Melco Resorts fell between 6.3% and 9.6% after Macau closed all casinos to contain its worst COVID epidemic since the beginning of the health crisis. Read more

The broader S&P 1500 Hotel, Restaurant & Leisure Index (.SPCOMHRL) fell 1.5%.

Falling issues outnumbered rising ones on the NYSE by a ratio of 2.41 to 1; on the Nasdaq, a ratio of 2.81 to 1 favored the decliners.

The S&P 500 posted two new 52-week highs and 30 new lows; the Nasdaq Composite recorded 20 new highs and 130 new lows.

Volume on U.S. exchanges was 9.33 billion shares, compared to an average of 12.92 billion over the past 20 trading days.

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Reporting by Stephen Culp; additional reporting by Amruta Khandekar and Shreyashi Sanyal in Bengaluru Editing by Marguerita Choy

Our standards: The Thomson Reuters Trust Principles.

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