Stocks fell Monday, with the S&P 500 and Dow retreating from record levels.
The Dow dropped more than 120 points, or 0.4%, after the index rallied to an all-time high of more than 34,000 last week. The S&P 500 also dipped below the index's record high, and the Nasdaq sank The 10-year Treasury yield rose to top 1.6%.
Bitcoin (BTC-USD) prices steadied Monday afternoon after plunging swiftly over the weekend. Bitcoin sank as much as 15% on Sunday, and other major coins like Ether and XRP also dropped. Bitcoin prices had reached a record high of more than $64,000 on Wednesday as Coinbase Global (COIN), the largest cryptocurrency exchange in the U.S., went public via a direct listing.
For equities, however, volatility has subsided considerably in recent sessions. The CBOE Volatility Index, or VIX, hovered near a 14-month low as stocks remained close to all-time highs.
"The S&P 500 has reached new highs while volatility has sharply declined. Low volatility has outweighed low correlations among stocks, driving return dispersion back below the long-term average," David Kostin, Goldman Sachs chief U.S. equity strategist, said in a note Monday.
"As the U.S. moves beyond key macro events such as the 2020 election, the $1.9 trillion fiscal stimulus package, and peak economic activity, we expect three defining themes for markets will be tax reform, infrastructure, and pricing power," Kostin said.
"The details of tax reform will drive wide variation in the size of the hit to company earnings, while only certain companies are likely to be direct beneficiaries of infrastructure spending," he added. "Similarly, the effect of rising input costs will vary depending on company margin profiles and ability to pass through costs to end consumers. These micro-driven catalysts should keep stock correlations low, but a return to a high dispersion environment will be challenging without an increase in volatility."
Corporate earnings season will accelerate this week, with companies including Netflix (NFLX), Johnson & Johnson (JNJ), Snap (SNAP) and Intel (INTC) poised to report results. So far, about 9% of S&P 500 companies have reported first-quarter earnings results, with 81% of these companies having beaten expectations – matching the record high beat rate from 2008.
"It’s not just cost-cutting delivering these results," Nicholas Colas, co-founder of DataTrek Research, said in a note Monday. "Revenue surprises are also at record levels: 84% of reporting companies have beaten top line expectations (old record in Q3 2020, 79%) and the mean revenue beat is 3.3 points ahead of Wall Street’s models (old record 2.9 points in Q4 2020)."
"Q1 2021 corporate earnings reports thus far are showing both upside revenue surprises and solid incremental earnings leverage from those top-line beats," he added. "We have been relying on the latter to support our positive view on U.S. large caps, but it’s nice to see the former as well."
4:04 p.m. ET: Stocks fall from record levels as technology shares drop; Dow ends 3-day winning streak
Here were the main moves in markets as of 4:04 p.m. ET:
S&P 500 (^GSPC): -22.14 (-0.53%) to 4,163.33
Dow (^DJI): -121.26 (-0.35%) to 34,079.41
Nasdaq (^IXIC): -137.58 (-0.98%) to 13,914.77
Crude (CL=F): +$0.30 (+0.48%) to $63.43 a barrel
Gold (GC=F): -$9.60 (-0.54%) to $1,770.60 per ounce
10-year Treasury (^TNX): +2.8 bps to yield 1.6010%
1:21 p.m. ET: Stocks hold lower, Nasdaq drops more than 1%
Here's where markets were trading Monday afternoon:
S&P 500 (^GSPC): -24.89 points (-0.59%) to 4,160.58
Dow (^DJI): -163.31 points (-0.48%) to 34,037.36
Nasdaq (^IXIC): -159.50 points (-1.14%) to 13,891.65
Crude (CL=F): +$0.22 (+0.35%) to $63.35 a barrel
Gold (GC=F): -$8.30 (-0.47%) to $1,771.90 per ounce
10-year Treasury (^TNX): +3 bps to yield 1.603%
9:43 a.m. ET: Coinbase, crypto-related stocks tumble after Bitcoin flash crash
Shares of Coinbase sank shortly after market open on Monday, adding to a stretch of volatile trading in the stock's short history on the public markets after Bitcoin prices plunged over the weekend.
Coinbase shares dropped 2% around 9:45 a.m. in New York, even as bitcoin, ethereum and other crypto prices recovered. Other stocks closely tied to digital currencies, including Bit Digital (BTBT) and Marathon Digital (MARA), also fell Monday morning.
9:31 a.m. ET: Stocks open slightly lower
Here's where markets were trading after the opening bell on Monday:
S&P 500 (^GSPC): -5.95 points (-0.14%) to 4,179.52
Dow (^DJI): -74.71 points (-0.22%) to 34,124.96
Nasdaq (^IXIC): -39.75 points (-0.27%) to 14,013.82
Crude (CL=F): +$0.01 (+0.02%) to $63.14 a barrel
Gold (GC=F): -$13.10 (-0.74%) to $1,767.10 per ounce
10-year Treasury (^TNX): +3.6 bps to yield 1.608%
8:27 a.m. ET: Coca-Cola shares rise after Q1 results beat estimates, with post-pandemic recovery helping boost sales
Coca-Cola (KO) posted first-quarter results that handily exceeded expectations, with the beverage giant offering signs of a strong consumer resurgence coming out of the COVID-19 pandemic.
First-quarter comparable earnings per share were 55 cents, or 5 pennies ahead of estimates, on adjusted operating revenue of $9.02 billion. This top-line growth represented an increase of 5% over last year, for the first year-over-year rise since the first quarter of 2020. Unit case volumes returned to 2019 levels in March, Coca-Cola added.
“We are encouraged by improvements in our business, especially in markets where vaccine availability is increasing and economies are opening up, and we remain confident in our full year guidance," Coca-Cola Company CEO James Quincey said in a press statement.
7:15 a.m. ET Monday: Stock futures pull back from record levels
Here's where markets were trading Monday morning:
S&P 500 futures (ES=F): 4,168.00, down 8.25 point or 0.2%
Dow futures (YM=F): 34,016.00, down 65 points or 0.19%
Nasdaq futures (NQ=F): 13,995.00, down 34.5 points or 0.25%
Crude (CL=F): -$0.14 (-0.22%) to $62.99 a barrel
Gold (GC=F): +$4.90 (+0.28%) to $1,785.10 per ounce
10-year Treasury (^TNX): +0.5 bps to yield 1.578%
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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