The stock market today (Monday) paused on news that a U.S. Federal Reserve policy shift may not be as far away as people think.
Just before noon, the Dow Jones Industrial Average was lower by 34.22, or 0.23% at 15,084.27. The Standard & Poor's 500 Index was flat at 1,632.97. The Nasdaq eked out a 0.02% gain, or 1.08 points, at 3,438.12.
Last week, equities continued their seemingly unstoppable climb with the Dow and the S&P closing at records several times. The Dow ended the week up 1%, the S&P 1.2%, and the Nasdaq 1.7%.
Now with all three indexes up 15% year-to-date, many investors have turned cautions.
"I think most people would be happy for that for the whole year," Marc Chandler, a Brown Brothers Harriman strategist told CNN Money.
Keeping today's stock market participants on the sideline was a Wall Street Journal piece printed Saturday detailing the Fed is seriously think about exiting QE. Jon Hilsenrath wrote central bank officials have mapped out a strategy for winding down the $85 billion monthly bond buying program, yet the timing is still being discussed.
The news stirred fears that a reduction in the Fed's stimulus measures, which have propped up and propelled equities, with wallop global markets.
Investors also considered disappointing data from Chiina, which showed industrial production expanded at a 9.3% rate in April, shy of the 9.5% forecast. The report is the latest to stoke worries about slowing growth in the world's second biggest economy.
Even an encouraging Commerce Department report on retail sales failed to boost stocks. Retail sales, which account for 30% of consumer spending, ticked up 0.1% in April after a 0.5% decline in March. The read was ahead of a 0.3% drop economists expected.
Bloomberg News made headlines after it was uncovered the media outlet was caught snooping on some of its 315,000 worldwide subscribers who use the company's terminals. Allegations include Bloomberg reporters were trained to use a function on the company's financial data terminals that allowed them to views users' activity in order to gain an edge in news coverage.
Stock Market Today's Big Movers
JPMorgan Chase & Co (NYSE: JPM) shares were up 0.45% at $49.17, despite reports CEO and Chairman Jamie Dimon will consider leaving the bank, where he has manned the helm since 2005, if shareholders vote to split his duties.
Shareholders are set to vote this week on a non-binding proposal to separate the chairman and chief executive role after last year's $6 billion-plus London whale trade loss raised questions about risk oversight.
Results of the vote will be announced May 21, but it's unclear what the board will do if the proposal passes.
Yum! Brands Inc. (NYSE: YUM) slumped 2.56% after the reporting April same stores sales tumbled 29% in China as a bird-flu scare hit its already suffering KFC business. Yum's China division typically contributes about half of the company's overall business.
The parent company of Taco Bell, Pizza Hut and KFC saw sales start to fall dramatically in China in December because of quality issues with some of its chicken suppliers. The company warned this quarter would be impacted the most. Indeed, KFC sales plunged 36%. On a bright note, sales at Pizza Hut grew 5%.
Notable Earnings This Week
Earnings season is nearly done. Of the 453 S&P 500 companies that have reported Q1 results, 301 have beat estimates, 115 have missed and 37 have met, according to data from S&P Capital IQ.
A few notable names will report this week:
- Macy's Inc (NYSE: M) is expected to post first-quarter earnings on Wednesday of $0.53 a share, up from $0.43 in the same quarter a year ago. The department store giant made recent headlines after losing a battle to maintain exclusive rights to Martha Stewart's merchandise.
- Cisco Systems Inc. (Nasdaq: CSCO) is expected to post Q3 earnings on Wednesday of $0.49 a share, a penny better than the same period a year earlier.
- Wal-Mart Stores Inc. (NYSE: WMT) is forecast to report Q1 EPS $1.15, up from $1.09 when the world's largest retailer releases earnings Thursday.
- J.C. Penney Company Inc. (NYSE: JCP) is projected to report a loss of $0.86 cents a share, much worse than the loss of $0.43 logged in the same quarter a year ago. Proxy advisory firm Egan Jones recommends Penney's shareholders not re-elect Steven Roth to the company's board of directors at the Thursday's annual meeting. The argument is that Roth, chairman of Vornado Realty Trust (NYSE: VNO) and one of Penney's largest shareholders, should be removed because he is an "affiliated" director who serves on the board's corporate governance committee and that committee should be composed only of independent outside directors.
Related Articles and News:
- The Wall Street Journal:
Fed Maps Exit From Stimulus
Retail sales edge up, show some strength in the economy
- The Wall Street Journal:
Oil Futures Decline as China Data Raises Demand Concerns
- CNN Money:
Stocks: Staring the week with a whimper