Stocks finished mixed Monday. The S&P 500 slipped less than 0.1%, ending a three-session winning streak. The Dow climbed 38 points, with its four-day rally its best stretch of gains since July. The Nasdaq Composite declined 0.2%.
Positive trade developments from last week and hopes of central bank stimulus helped support risk sentiment, sending U.S. Treasury yields advancing to the highest levels in three weeks. The yield on the 10-year note spiked eight basis points to 1.63%.. The U.S. and China plan to meet for high level talks in October. Meanwhile, market participants widely anticipate another interest rate cut next week after Fed Chair Jerome Powell reiterated policymakers’ intention to “act as appropriate” to sustain the current economic expansion during a speech Friday.
Six of 11 S&P 500 sectors closed in negative territory. Health Care shares led decliners after some Wall Street analysts warned of the potential influx of drug pricing headlines as Congress returns from August’s recess. The more traditionally defensive Utilities and Real Estate groups also underperformed, while Financials rallied more than 1.5% amid a jump in Treasury yields. In corporate news, AT&T added 1.5% after activist investor Elliott Management disclosed a $3.2 billion dollar stake in the wireless carrier and outlined a plan to boost shareholder value.
On the data front, consumer credit increased to $23.3 billion in July, the fastest pace in nearly two years. In commodities, WTI crude climbed 2.4% to $57.85/barrel on expectations of further OPEC supply cuts.