Wall Street ends down as megacaps give back gains
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[December 05, 2023] By
Noel Randewich and Shristi Achar A
(Reuters) - U.S. stocks ended lower on Monday, interrupting last week's
rally, as investors turned cautious ahead of employment data due this
week that could alter expectations that the Federal Reserve will cut
interest rates early next year.
The S&P 500 receded, with megacaps Microsoft, Apple, Nvidia and Amazon
dipping over 1%, pressured by higher U.S. Treasury yields, which made
returns on stocks less attractive.
The S&P 500 registered its highest close of the year on Friday as
remarks from Fed Chair Jerome Powell acknowledged the central bank's
need to "move forward carefully" amid signs of economic softening,
comments that bolstered expectations the Fed has finished raising rates.
Small-cap stocks rose on Monday, with the Russell 2000 rallying about 1%
and bringing its gain this year to almost 7%.
"There is a lot of chop around here that is not necessarily meaningful,"
said Tom Martin, a senior portfolio manager at GLOBALT Investments in
Atlanta.
"We have a really important Fed meeting coming up, and what makes it
important is that all of a sudden, the market has decided that they're
going to cut early next year."
The S&P 500 declined 0.54% to end the session at 4,569.78 points.
The Nasdaq declined 0.84% to 14,185.49 points, while Dow Jones
Industrial Average declined 0.11% to 36,204.44 points.
![](http://archives.lincolndailynews.com/2023/Dec/05/images/ads/current/graue_sda_042021.png)
Volume on U.S. exchanges was relatively heavy, with 12.7 billion shares
traded, compared to an average of 10.6 billion shares over the previous
20 sessions.
Ride-hailing service Uber Technologies rallied 2.2% after an
announcement on Friday it will join the S&P 500 effective Dec. 18.
Shares of Alaska Air Group tumbled 14% after the carrier said on Sunday
it would acquire peer Hawaiian Holdings for $1.9 billion, including
debt. Hawaiian's shares nearly tripled in value, helping lift the Russel
index.
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![](../images/120523PIX/busine51.jpg)
Traders gather at the post that trades Alaska Airlines stock on the
floor at the New York Stock Exchange (NYSE) in New York City, U.S.,
December 4, 2023. REUTERS/Brendan McDermid
![](http://archives.lincolndailynews.com/2015/May/02/images/ads/current/guzzardo_lda022609.png)
This week's main macroeconomic focus will be Friday's jobs report
for November, which may help investors gauge the Fed's likely
interest rate path, as well as the potential for a "soft landing" -
where the Fed manages to bring inflation under control while
averting a recession.
Traders widely expect the central bank will keep rates unchanged at
its meeting next week. Interest rate futures suggest a 58%
probability the Fed will start cutting rates by March 2024,
according to the CME Group's FedWatch tool.
However, some analysts warn that markets have been too quick to
price in lower interest rates.
Adding to declines on Monday were renewed fears about a widening of
the war in Israel and Gaza after an attack on three commercial
vessels in the southern Red Sea.
Shares of cryptocurrency firms such as Coinbase Global, Riot
Platforms and Marathon Digital rallied between 5% and 9% after
bitcoin crossed $40,000 for the first time this year.
Advancing issues outnumbered falling ones within the S&P 500 by a
1.0-to-one ratio.
The S&P 500 posted 38 new highs and no new lows; the Nasdaq recorded
125 new highs and 63 new lows.
The S&P 500 has gained 19% so far in 2023, while the Nasdaq has
recovered 24%.
(Reporting by Amruta Khandekar and Shristi Achar A in Bangalore, and
by Noel Randewich in Oakland, Calif.; Editing by Anil D'Silva, Pooja
Desai and Aurora Ellis)
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