The major domestic equity indexes all ended the day on Monday in negative territory, dragged down by financials as underwhelming bank earnings restrained Street enthusiasm. Yet, despite the red ink, the S&P 500 index remained within a percent of its record high.
Following a January-March rally that marked the stock market’s best quarterly performance in nearly a decade, stocks had been in a holding pattern in April ahead of first quarter earnings season.
Goldman Sachs fell 3.8 percent after the investment bank’s first quarter revenue came in below consensus expectations. Citigroup posted higher-than-expected earnings as cost-cutting offset falling revenues. Its shares closed out the day nominally lower, falling 0.1 percent.
With first quarter reporting season shifting into high gear, the consensus appears to be that the S&P 500 companies will chalk up a 2.1 percent year-on-year drop in earnings. While an improvement over recent estimates, it would still mark the first annual decline in earnings since 2016.
Bank of America, Morgan Stanley, Netflix, Johnson & Johnson, Textron, Honeywell, Schlumberger and American Express are among the closely-watched earnings expected this holiday-shortened week.
It appears that U.S. negotiators have softened their demands that China curb industrial subsidies as a condition for a trade deal, marking a retreat from a core U.S. objective.
Financials were the largest percentage losers, closing down 0.6 percent and ending their three-day winning streak.
Waste Management rose 2.4 percent following its announcement that it would buy smaller rival Advanced Disposal Services for about $3 billion.
Boeing fell 1.1 percent after Trump tweeted that the company should fix and “rebrand” its 737 MAX jet.
Lyft continued its slide, falling 6.3 percent and is now trading about 22 percent below its $72 issue price.
Approximately 5.75 billion shares changed hands on the major domestic equity exchanges, a number that was less than the 6.91 billion share average over the past 20 trading days.