March 29, 2024

Stocks Open Higher Ahead of Data Reports

The Standard Poor’s 500-stock index is off to its worst start to a year in almost a decade, closing lower on Monday for a third straight trading day.

Although the declines have been modest, the direction has been consistently down. The S.P. 500 index has fallen 1.2 percent from its most recent record high close on Dec. 31.

The S.P. 500 surged almost 30 percent last year, its best annual gain since 1997. The banner year ended with the stock market climbing to record highs in the face of signs that the economy was strengthening.

“The market is basically looking for additional confirmation of economic strength and may be marking time as it catches its breath from a pretty strong run at year-end,” said Jim Russell, a regional investment director at U.S. Bank.

The S.P. 500 fell 4.60 points, or 0.3 percent, to 1,826.77. The Dow Jones industrial average dropped 44.89, or 0.3 percent, to 16,425.10. The Nasdaq composite index fell 18.23, or 0.4 percent, to 4,113.68.

The weak start to 2014 is not a good omen for stock investors. In 2005, the last time the S.P. 500 dropped on the first three trading days of the year, it climbed just 3 percent for the whole year.

Despite the slow start, many analysts say it is too early to call a change in the market’s upward trend.

Reports on Monday on American service companies contained hopeful signs, as they grew at a steady, but slightly slower, pace in December. The most closely watched economic report of the week will be the Labor Department’s jobs survey for December, which is scheduled for release on Friday. That will influence the Fed’s decisions on reducing its bond purchases.

Company earnings reports also start coming out this week, providing another catalyst that may lift the market. Alcoa, a former Dow stock, will be one of the first major companies to report its fourth-quarter earnings, after the close of trading on Thursday.

“This downturn is persisting a little bit more than I would expect,” said Jack Ablin, chief investment officer at BMO Private Bank. “Between the jobs report Friday and earnings results next week, we will have a much better idea of the drivers of the market.”

In government bond trading, the price of the benchmark 10-year Treasury note rose 10/32, to 98 7/32, and its yield fell to 2.96 percent from 3 percent late Friday.

Article source: http://www.nytimes.com/2014/01/07/business/daily-stock-market-activity.html?partner=rss&emc=rss

Speak Your Mind