By Damian J. Troise and Alex Veiga
Another wobbly day on Wall Street ended Monday with an uneven finish for the major stock indexes as losses by communication and technology companies kept gains elsewhere in the market in check.
The S&P 500 fell 0.4%, giving back some of its recent gains. The Dow Jones Industrial Average was little changed after wavering between a gain of 0.7% and a loss of 0.3%. The tech-heavy Nasdaq composite fell 0.6%.
The uncertain trading follows weeks of volatility for major indexes as traders try to figure out how stock valuations will be affected by the interest rate hikes looming on the horizon as the Federal Reserves moves to tame inflation.
Wall Street is coming off of two weeks of gains following a January stumble that served partially as a “pressure relief valve,” said Mark Hackett, chief of investment research at Nationwide.
“Some of the emotion that we’ve been dealing with in the first several weeks of the year has started to ease,” he said. “You almost needed that; the expectations had been so high.”
The S&P 500 slipped 16.66 points to 4,483.87. The benchmark index is now 6.5% below the all-time high it set on Jan. 3.
The Dow was essentially flat after inching up 1.39 points to 35,091.13.. The Nasdaq fell 82.34 points to 14,015.67.
Small-company stocks outpaced the broader market. The Russell 2000 rose 10.24 points, or 0.5%, to 2,012.60.
Communication and technology companies were the biggest drag on the S&P 500. Facebook’s parent, Meta, fell 5.1% and Google’s parent company Alphabet fell 2.9%. Microsoft fell 1.6%.
Energy and financial companies made solid gains. Chevron rose 2% and insurer Allstate rose 2.2%.
Travel-related companies also gained ground. Carnival rose 7.8%, Royal Caribbean gained 8.4% and American Airlines added 5%.
Treasury yields were broadly lower. The yield on the 10-year Treasury slipped to 1.92% from 1.93% late Friday.
Investors are still gauging the impact of rising inflation on businesses and consumers while remaining cautious about the Federal Reserve’s plan to fight inflation. Wall Street will get another key update on inflation Thursday with the Labor Department’s report on consumer prices for January.
The Fed plans to raise interest rates to fight inflation. Investors expect the first hikes in March and are wary about the pace and quantity of rate increases in 2022.
Investors have another busy week reviewing the latest corporate report cards. Meat producer Tyson Foods rose 12.2% after reporting strong results.
Several big companies are on deck this week to report their results, including Pfizer on Tuesday and Walt Disney on Wednesday. Twitter and Coca-Cola will report on Thursday.
Outside of earnings, several companies gained ground on buyout news Monday. Spirit Airlines jumped 17.2% after Frontier Airlines’ parent company agreed to buy the carrier in a deal worth $2.9 billion.
Peloton rose 20.9% following reports that the exercise bike and treadmill company is a buyout target for companies including Nike and Amazon. The company has been on a roller-coaster ride since the pandemic began. Its stock surged more than 400% in 2020 as COVID-19 forced lockdowns and shifted the workout trend from the gym to home. It spend 2021 giving back nearly all of those gains as businesses reopened and people started heading back to gyms.
Shares have been choppy this year for Peloton, especially following reports in January that its was temporarily halting production of its connected fitness products amid waning consumer demand. Activist investor Blackwells Capital asked the company to remove CEO John Foley and consider selling the company just a few days after those reports.
Updated on February 7, 2022, at 5:03 p.m. ET.