U.S. stocks fell sharply on Monday to start the week, boosted by losses in tech stocks as investors braced for the start of earnings season and new inflation data to be released Wednesday.
The Nasdaq Composite fell 2.3% and the S&P 500 fell 1.2%. The Dow Jones Industrial Average fell 160 points, or 0.5%. Monday’s moves follow a week of gains for stocks that saw all three benchmarks post weekly gains despite closing flat after Friday’s jobs report.
Meanwhile, the euro fell closer to parity with the US dollar. The currency fell as much as 1.4% to $1.0044, hitting a new two-decade low, as investors considered the possibility that an energy crisis could push the European economy into recession.
Twitter ( TWTR ) came into focus on Monday after Elon Musk pulled out of his $44 billion bid for the social media platform late last week. Musk cited “material” breaches of multiple provisions of the agreement in his decision to terminate the agreement, including Twitter’s recent decision to eliminate some of its recruiting team and its failure to provide Musk with what it considers a accurate count of “bots” or fake. accounts Shares closed up 11.3% to $32.65 a piece.
“It’s not really about the robots,” Wells Fargo senior equity analyst Brian Fitzgerald told Yahoo Finance Live on Friday. “This Team Musk articulates for a lower price.”
Elon Musk pulled the plug on his deal to buy Twitter on July 8, 2022, accusing the company of “misleading” statements about the number of fake accounts, a regulatory filing showed. (Photo by CHRIS DELMAS/AFP via Getty Images)
Meanwhile, oil prices fell on Monday amid renewed COVID fears in China that stoked supply concerns. West Texas Intermediate (WTI) crude futures were down about $1, or 1%, at $103.70, partially reversing a 2% gain on Friday. Brent crude also fell about 0.3% to $106.71 a barrel.
Investors are expecting a flurry of quarterly results this week as major companies kick off a new earnings season.
Early reporters include JPMorgan Chase ( JPM ), Wells Fargo ( WFC ) and Citigroup ( C ) among the big banks set to release results, as well as PepsiCo ( PEP ) and Delta Air Lines ( DAL ).
Wall Street cut its second-quarter top-line earnings per share estimate for the S&P 500 by 1.1% between March 31 and June 30, according to recent data from FactSet.
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While the 4.1% annual earnings growth rate estimated for the benchmark for the second quarter would mark the slowest since late 2020, the cut is smaller than analysts had expected. usually observes before earnings season.
Later this week, investors will get the latest indicator of how fast consumer prices are rising in the US economy when the Bureau of Labor Statistics releases its consumer price index (CPI) on Wednesday ) for June. Economists polled by Bloomberg expected headline inflation to rise 8.8% last month, an increase that would be the highest since December 1981 and the hottest reading of this current inflation cycle.
“We expect another strong inflation,” Deutsche Bank’s US economist Matthew Luzzetti told Yahoo Finance Live on Monday. “For a market that has certainly been dealing with recession fears, I think this week will see renewed fears of high inflation.”
Twitter (TWTR) Shares fell 11.3% to close at $32.65 after Elon Musk pulled out of his $44 billion bid for the social media platform on Friday. Musk cited “material” breaches of multiple provisions of the agreement in his decision to terminate the agreement, including Twitter’s recent decision to eliminate some of its recruiting team and its failure to provide Musk with what it considers a accurate count of “bots” or fake. accounts
Metaplatforms (TARGET) fell 4.7% to $162.88 after Needham & Company analyst Laura Martin cut her rating to Underperform from Hold, advising investors to stay away as the social media giant assesses “various structural valuation risks,” including changes in consumer behavior, competition, moat degradation, regulatory regulations. risks and investment risks Metaverse.
Uber (UBER) Shares fell 5.1% to $21.21 a share after reports the carrier tried to pressure politicians, including French President Emmanuel Macron, and defied certain laws in efforts to expand its operations worldwide from 2013 to 2017. The so-called “Uber files” reported by the Guardian and French newspaper Le Monde draws on more than 124,000 leaked documents from outlets that reveal “ethically questionable practices” that fueled the company’s rise under co-founder Travis Kalanick.
American Airlines (AAL) shares fell 3.9% along with declines in other airline stocks amid concerns about a resurgence of COVID in China.
Duolingo (for) fell 14.3% after KeyBanc analyst Justin Patterson downgraded the stock to Sector Weight from Outperform “due to inflation headwinds and signs of softness in other freemium apps,” a model of business where consumers do not pay anything to download the application, but it is offered to them. optional in-app purchases for premium features.
Match group (MTCH) shares fell 6.7% after analysts at KeyBanc Capital Markets cut their price target on the company to $90 from $125, citing expectations that the dating app may come under pressure in an environment recessive The firm, however, reiterated its overweight rating on the stock.
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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