The Dow Jones Industrial Average rose on Monday as the index rebounded from a five-day losing streak but pulled back from previous intraday highs.
The Dow rose 125 points, or 0.4%. The S&P 500 ticked 0.2% lower. The Nasdaq Composite lost 0.4%.
The S&P 500 is well on its way to recording its sixth consecutive losing day. The Nasdaq Composite will post its fourth consecutive negative price.
Covid cases hit a 7-day average of about 136,000 as of Friday, up from 157,000 average new cases in late August, the CDC said. Pfizer’s Covid vaccine could be approved for children by the end of next month, known sources told Reuters.
“We maintain a risk-friendly allocation amid strong global growth as the world continues to recover from the pandemic, accommodative policies and ongoing earnings surprises. The reopening of the world economy has been delayed by the delta variant spread, but the delta wave is likely to recede “in the US and worldwide, and the pandemic recovery should resume,” JPMorgan’s Marko Kolanovic said in a Monday Note.
The rally of the Dow faded as the day wore on; the index jumped more than 300 points earlier in the session.
CNBC’s Jim Cramer warned investors Monday morning that positive stock market openings could wear off as the trading day progressed, especially in a historically troubled month like September.
“I worry that we’ll have another positive opening and that people will come in and buy and then get hurt. So I’m really warning people to come in, ”Cramer said on“ Squawk Box ”.
Energy names surfaced on Monday as oil prices rose. Marathon Oil, APA Corp, Occidental Petroleum and other energy stocks were among the top winners of the S&P 500.
Names related to the reopening also gained. Delta Air Lines and Carnival Corp climbed higher. Traditional cyclical games GM and Citigroup rose.
Nike shares fell after BTIG downgraded the stock, citing supply chain challenges caused by the pandemic. Manufacturing issues could have a significant impact on Nike’s Christmas sales, BTIG said.
“Delivery bottlenecks, inventory shortages, higher raw material prices and higher shipping rates have all contributed to higher input costs,” said Charlie Ripley, senior investment strategist at Allianz Investment Management.
Fears of inflation have contributed to the recent price falls in the market. Data released on Friday showed that producer prices rose 0.7% in August and 8.3% year-over-year, the largest annual increase since records were first recorded in November 2010.
“[Friday’s] Wholesale price data should open the Fed’s eyes as inflationary pressures still do not seem to be easing and will likely continue to be felt by consumers in the months ahead, “said Ripley.
The closely watched consumer price index will be released on Tuesday. At that point, the road will see how much of the increased cost is passed on to consumers. Economists surveyed by FactSet expect consumer prices to have risen by 5.3% on an annual basis in August. Retail sales will be released during the week.
Stocks have been under pressure since the Labor Department’s August job report released on September 3 missed expectations. The market is buzzing with concerns that the pandemic will continue to stifle economic growth, while hot inflation will drive the Federal Reserve to act.
“The negative impact of the delta on cyclical trading is clear,” noted Jefferies strategists. “It’s becoming increasingly apparent that the effects of the Delta have delayed any attempt by the Federal Reserve to throttle, as well as giving new impetus to big tech stocks, with growth that has outpaced this quarter Has.”
The Fed will begin its two-day monetary policy meeting on September 21, when investors look for clues about the central bank’s bond-buying program.
Despite last week’s losses, the major averages are still relatively close to their record highs. The Dow, S&P 500 and Nasdaq Composite are all less than 3% below their all-time highs.
Become a smarter investor with CNBC Pro.
Get stock picks, analyst calls, exclusive interviews and access to CNBC TV.
Sign in to start one Try it for free today