Wall Street falls as investors cautious ahead of big earnings; Treasury yields rise

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Boeing rises after offering new wage deal

Humana and Cigna drop on reports companies resume merger talks

114 S&P 500 companies will report results this week

Nvidia briefly hits all-time high

Index declines: The Dow fell 0.75%, the S&P 500 fell 0.43%, and the Nasdaq fell 0.16%

(Updated at 12:08 PM ET/1608 GMT)

Author: Lisa Pauline Matakar and Purvi Agarwal

Wall Street fell on Monday, retreating from strong gains last week as investors awaited earnings reports from major companies to gauge whether stocks will maintain recent record highs.

A surge in U.S. Treasury yields added to the pressure, with the benchmark 10-year Treasury yield as high as 4.17%, a 12-week high.

Most large technology stocks that are sensitive to interest rates fell, with Tesla down 1% and Microsoft and Meta Platforms both down 0.7%.

The Dow Jones Industrial Average fell 323.49 points, or 0.75%, to 42,952.42; the S&P 500 fell 24.97 points, or 0.43%, to 5,839.70; and the Nasdaq Composite fell 29.52 points, or 0.16%, to 18,460.03.

After a rather optimistic start to earnings season, focus is on the 114 S&P 500 companies scheduled to report results this week. These include Tesla, Coca-Cola and Texas Instruments.

Senior Portfolio Tim Ghriskey said: “There’s always going to be a level of caution in the heart of earnings season… There are some underlying factors in the market that are generally positive, but I would say , these factors were just overshadowed by the earnings report,” said strategists at Ingalls and Snyder.

“We’re seeing yields rising across the board. Some of the economic data we’ve seen recently is a little nervous.”

Data compiled by London Stock Exchange Group (LSEG) on Friday showed that 83.1% of companies that have reported so far have beaten earnings expectations.

Griski said some traders may be taking profits.

The three major stock indexes posted gains for a sixth straight week on Friday, marking their best winning streak so far this year, with the Dow Jones and S&P 500 both closing at record highs.

Stocks fell sharply on Monday, with nearly all of the S&P 500’s 11 major sectors falling, with the exception of information technology.

The rate-sensitive real estate sector fell 1.9% as yields rose, while the technology sector was boosted by a 2.3% gain in chip giant Nvidia, which briefly hit a new all-time high.

The Russell 2000 index of economically sensitive small-cap stocks fell 1.4%.

Investors are also looking ahead to the upcoming U.S. presidential election, with polls showing former President Donald Trump’s odds improving.

Danske Bank analysts said: “As the election date approaches, even small changes in opinion polls can cause seemingly erratic swings in market sentiment.”

Meanwhile, Boeing shares rose 3% on news that workers could vote on a new deal to end a costly five-week strike.

Spirit Airlines shares soared 66.7% after the company reached a deal to extend its debt refinancing term by two months.

Humana shares fell 1.5% on reports that Cigna has resumed merger talks with health insurance companies. Cigna shares fell 4.4%.

Fed officials Neel Kashkari, Jeffrey Schmid and Mary Daly are scheduled to speak that day.

Home sales, preliminary PMI and durable goods reports are on the data list this week, along with the Fed’s Beige Book.

Declining issues outnumbered advancing ones on the NYSE by a 4.16-to-1 ratio and on the Nasdaq, a 2.6-to-1 ratio on the Nasdaq.

The S&P 500 hit 39 new 52-week highs and two new lows; the Nasdaq hit 72 new highs and 30 new lows.

(Reporting by Lisa Mattackal and Purvi Agarwal in Bengaluru; Editing by Pooja Desai)