Market Snapshot: S&P 500, Nasdaq Composite book closing records, but Dow loses ground

How did stock benchmarks trade?

• The Dow Jones Industrial Average
  DJIA,
  -0.44%
  fell 150.57 points, or 0.4%, closing at 34,283.27.

• The S&P 500 index
  SPX,
  +0.23%
  added 9.91 points, or 0.2%, to end at a record 4,290.61, after touching an intraday record of 4,292.14.

• The Nasdaq Composite
  COMP,
  +0.98%
  climbed 140.12 points, or 1%, finishing at a record 14,500.51, after setting its all-time intraday peak at 14,505.19.

On Friday, the Dow put in a weekly gain of 3.4%, its largest since the week ended March 12; the S&P 500 rose 2.7% for its sharpest weekly climb since Feb. 5, while the Nasdaq Composite Index gained 2.4% for its steepest weekly rise since April 9.

What drove the market?

The focus, in the last trading days of June, remained on quarter-end positioning, discussions surrounding infrastructure and the outlook for the economy’s reopening phase as market participants watch COVID variants.

“I think in the next couple of days, we could see a little bit more volatility,” said James Ragan, director of wealth management research at D.A. Davidson Companies.

“As institutional funds get situated for the second half, there could be a bit more trading than usual over the next couple of days,” he told MarketWatch, adding that inflation, the growth outlook and the direction of interest rates remain top of mind for investors.

“I think the outlook for the market has been fairly positive, but the bond market may be expressing some concern about the sustainability of growth in the second half of the year,” he said.

In Washington, hopes were high for progress on a bipartisan infrastructure bill that could deliver a fresh jolt to business activity in the U.S., while improving roads, bridges and tunnels, after President Joe Biden over the weekend walked back comments that tied the $1 billion infrastructure bill to an antipoverty package.

But worries lingered about the persistence of growing pricing pressures in the economy’s recovery phase from COVID, with investors expected to shift their attention to data on the labor market. The June jobs report will be released on Friday.

The Federal Reserve has insisted that inflation likely will be a temporary phenomenon, but policy makers also have said improvements in the jobs market will form a key part of the decision making process around when to begin curtailing its program of monthly asset purchases and eventually raising its benchmark interest rate, which currently stand at a range between 0% and 0.25%.

A few Fed officials already said they are expecting to raise rates as soon as late 2022, while scaling back asset purchases, or quantitative easing, could commence by the beginning of next year.

Lindsey Bell, chief investment strategist at Ally Invest, expects more modest corporate earnings growth a blockbuster pace of year-over-year growth in the first and second quarters, in part, as COVID benefits fade.

“Wall Street estimates earnings growth could slow to an average of 17% in the second half of this year,” Bell wrote in emailed commentary, down from about 35% in the first quarter and forecasts of an 55% peak in the second quarter for S&P 500 companies. “While that is much lower than the first half of this year, it is much better than the average growth rate of 8.4% per quarter going back to 2002.”

On the health front, a study found that COVID vaccines developed by Pfizer
PFE,
+0.36%
with German partner BioNTech
BNTX,
-0.69%
and Moderna
MRNA,
+1.36%
using mRNA may offer protection against the illness for years. About 46.1% of the U.S. population now has been fully vaccinated, according to the latest data from the Centers of Disease Control and Prevention.

However, Hong Kong said Monday it will ban U.K. passenger flights this week to curb the virus. And in Australia, officials are battling to contain several COVID-19 clusters around the country, in what some experts have described as the nation’s most dangerous stage of the pandemic.

The World Health Organization on Friday urged fully vaccinated people to continue to wear masks to combat the delta variant of the COVID-19 strain.

On the housing front, the Consumer Financial Protection Bureau on Monday rolled out new rules on foreclosures, starting in late August, that will give borrowers more time to become current on past-due mortgages and more options, including loan modifications and other remedies, to avoid foreclosures. “An unchecked wave of foreclosures would drain billions of dollars in wealth from the Black and Hispanic communities hardest hit by the pandemic,” the consumer watchdog said.

Investors heard more from Fed officials. Eric Rosengren, the president of the Boston Fed, expressed concern over the housing market in an interview with the Financial Times, as data show house prices soaring.

In cryptos, Fed Vice Chair for Supervision Randal Quarles said a central-bank digital dollar could pose considerable risk to the financial system.

Which companies were in focus?

• Facebook Inc.
  FB,
  +4.18%
  shares closed up 4.2%, soaring to a market cap above $1 trillion for the first time ever, after a federal court dismissed the Federal Trade Commission’s antitrust lawsuit against the company, which would have split up the social-networking giant.

• Bed Bath & Beyond 
  BBBY,
  +5.98%
  shares rose 6% after the company detailed its enhanced paid parental leave plan, up to eight weeks leave to parents after the birth, adoption or fostering of a new child.

• Carnival Corp. 
  CCL,
  -7.04%
   shares were 7% lower after the cruise line said Monday morning that it may sell up to $500 million in stock from time to time as part of an at-the-money equity offering program.

• Intellia Therapeutics Inc. stock
  NTLA,
  +50.21%
  popped 50% Monday as excitement builds over its pipeline of treatments that apply the gene-editing technology known as Crispr-Cas9. 

• Chinese ride-sharing company DiDi Global Inc. DIDI, set terms for its much anticipated initial public offering on Monday, with plans to offer 288 million American Depositary Shares priced at $13 to $14 each.

• Cybersecurity company SentinelOne S set terms for its initial public offering on Monday with plans to offer 32 million shares, priced at $31 to $32 each. 

• Shares of U.K. luxury goods group Burberry 
  BURBY,
  -8.19%
  slumped 8.2% after Marco Gobbetti said he would be leaving the company at the end of the year to take the same role at leather goods maker Salvatore Ferragamo
  SFER,
  -2.67%
  in his native Italy. Burberry said it has begun a search for his successor.

• Virgin Galactic Holdings
  SPCE,
  -1.91%
  gave back some of Friday’s sharp advance, which came after the Federal Aviation Administration granted approval to the company to fly customers into space. Shares fell 1.9% Monday.

How did other assets fare?

• The yield on the 10-year Treasury note TMUBMUSD10Y retreated by 5.7 basis points to 1.478%. Yields and bond prices move in opposite directions.

• The ICE U.S. Dollar Index DXY, a measure of the currency against a basket of six major rivals, rose 0.1%.

• Oil futures retreated, with the U.S. crude benchmark CL00 settling 1.5% lower at $72.91 a barrel. Gold futures GC00 closed higher, up 0.2% to settle at $1,780.70 an ounce.

• In European equities, the pan-Continental Stoxx 600 SXXP closed 0.6% lower. London’s FTSE 100 declined 0.9%.

• In Asia, the Shanghai Composite SHCOMP, Japan’s Nikkei 225 NIK and Hong Kong’s Hang Seng Index HSI all ended marginally lower.