Oil stocks pull S&P 500, Dow Jones lower as virus fears weigh in

A Wall Street sign is visible in front of the New York Stock Exchange (NYSE) in New York, New York, United States on July 19, 2021. REUTERS / Andrew Kelly

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  • Energy stocks affected by increase in COVID-19 cases
  • Sanderson Farms wins after $ 4.53 billion takeover bid
  • Indices: Dow down 0.23%, S&P down 0.12%, Nasdaq up 0.12%

Aug 9 (Reuters) – The S&P and Dow indexes retreated from record highs on Monday as energy and other sectors sensitive to economic growth fell amid concerns over increasing COVID cases -19.

Energy stocks (.SPNY), down 1.2%, took the brunt of the sell off following a drop in crude as an increase in coronavirus cases, particularly in China, raised fears of new restrictions that could hurt demand for oil.

Eight of S&P’s top 11 sectors fell, while stocks such as consumer staples (.SPLRCS) and financials (.SPSY) led the gains.

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Miners have also come under pressure from sharp declines in copper and gold prices amid concerns over Chinese demand. The materials sector (.SPLRCM) fell 0.3%, while Freeport-Mcmoran Inc (FCX.N), the world’s largest publicly traded copper producer, fell 1%.

In the United States, COVID-19 infections increased by at least 22,783 on Sunday to reach 35.94 million cases in total, according to a Reuters tally.

“The concern is that we could be facing higher (interest) rates, with a potential slowdown caused by COVID-19, which is sort of the worst case scenario,” said Robert Pavlik, portfolio manager principal at Dakota Wealth in Fairfield, Connecticut.

Investors were waiting for new catalysts to push the market higher, after strong jobs data saw the S&P 500 (.SPX) and Dow Jones (.DJI) end last week at record highs.

A meeting of Federal Reserve leaders in Jackson Hole, Wyoming, later this month, is also expected to shed light on the central bank’s potential plan to scale back its stimulus program, following the hike in the inflation and the strength of the labor market.

The focus will also be on a $ 1 trillion bipartisan infrastructure bill in the United States, with a vote possible by Tuesday, after details of the bill have secured Senate support in the Senate. weekend course. Read more

At 11:34 a.m. ET, the Dow Jones Industrial Average (.DJI) was down 79.55 points, or 0.23%, to 35,128.96, the S&P 500 (.SPX) was down 5.31 points, or 0.12%, to 4,431.21, and the Nasdaq Composite (.IXIC) gained 17.41 points, or 0.12%, to 14,853.17.

A bumper earnings season has seen U.S. stocks hit record highs over the past two weeks, as several consensus results from large companies have boosted confidence in a post-COVID economic recovery this year.

Analysts expected second-quarter profit growth of 93.1% for companies in the S&P 500 on Friday, according to IBES data from Refinitiv. Of the 443 companies in the index that have posted earnings so far, 87.4% beat analysts’ expectations, the highest on record.

Sanderson Farms Inc (SAFM.O) gained 7.2% after agreeing to be bought out for $ 4.53 billion by commodities trader Cargill Inc and investment firm Continental Grain Co at a time when meat prices were skyrocketing due to high demand. Read more

Tyson Foods Inc (TSN.N) gained 7.8% after the meat processor increased its revenue forecast for fiscal 2021. Read More

Falling issues outnumbered advances for a 1.64-to-1 ratio on the NYSE and a 1.02-to-1 ratio on the Nasdaq.

The S&P Index recorded 24 new 52-week highs and 1 new low, while the Nasdaq recorded 62 new highs and 46 new lows.

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Report by Ambar Warrick in Bangalore; Editing by Shounak Dasgupta

Our Standards: Thomson Reuters Trust Principles.

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Felix J. Dixon