U.S. Stocks Climb Off Worst Levels But Remain Mostly Lower

After coming under pressure early in the session, stocks have climbed off their worst levels of the day but remain mostly lower in afternoon trading on Monday. The major averages are all in negative territory after ending last Friday’s trading narrowly mixed.

Currently, the tech-heavy Nasdaq continues to underperform its counterparts, slumping by 198.50 points or 1.7 percent at 11,436.80. The S&P 500 is down 32.05 points or 0.8 percent at 3,867.33, while the narrower Dow is posting a more modest loss, down 67.57 points or 0.2 percent at 31,270.58.

Renewed Covid concerns contributed to the early weakness on Wall Street, as Shanghai reported its first case of the highly infectious BA.5 omicron sub-variant, raising fears of more lockdowns.

Macau also closed all its casinos for the first time in over two years on Monday after a coronavirus outbreak in the world’s biggest gambling hub.

Casino operators Las Vegas Sands (LVS) and Wynn Resorts (WYNN) are posting steep losses following the news, with both stocks plunging by 6.9 percent.

Shares of Twitter (TWTR) have also moved sharply lower after Elon Musk called off his $44 billion takeover of the social media giant. Twitter said it plans to pursue legal action to enforce the merger agreement.

Selling pressure has waned over the course of the session, however, as some traders stick to the sidelines amid a lack of major U.S. economic data.

The economic calendar picks up later this week with the release of reports on consumer and producer price inflation, retail sales and industrial production.

Earnings season also unofficially gets underway later this week, as financial giants JPMorgan Chase (JPM), Morgan Stanley (MS), Citigroup (C) and Wells Fargo (WFC) are due to report their quarterly results.

Sector News

Oil service stocks continue to see substantial weakness in afternoon trading, with the Philadelphia Oil Service Index plunging by 3 percent.

The weakness among oil service stocks comes as the price of crude oil for August delivery has climbed well off its worst levels but remains down $0.92 at $103.87 a barrel.

Significant weakness also remains visible among airline stocks, as reflected by the 2.5 percent nosedive by the NYSE Arca Airline Index.

Brokerage stocks also continue to see considerable weakness on the day, dragging the NYSE Arca Broker/Dealer Index down by 1.7 percent.

Steel, semiconductor and networking stocks have also shown notable moves to the downside, although most sectors have climbed off their worst levels.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Monday. China’s Shanghai Composite Index slumped by 1.3 percent and Hong Kong’s Hang Seng Index plunged by 2.8 percent, although Japan’s Nikkei 225 Index bucked the downtrend and jumped by 1.1 percent.

Most European stocks also moved to the downside on the day. While the U.K.’s FTSE 100 Index ended the session nearly unchanged, the French CAC 40 Index slid by 0.6 percent and the German DAX Index tumbled by 1.4 percent.

In the bond market, treasuries are regaining ground following the sharp pullback seen over the past few sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 10.6 basis points at 2.995 percent.

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