Stocks fall ahead of busy week for markets
Stocks edged lower Monday in anticipation of a series of big economic reports due out this week. A string of big-name merger deals wasn't enough to push stocks higher.
Three days before the end of the month, a blistering rally instocks appears to be fading.Skip to next paragraph
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The stock market edged lower Monday as investors waited for a series of big economic reports due out this week. A string of big-name merger deals wasn't enough to push indexes higher.
On Wednesday the government will report its first estimate of U.S. economic growth for the second quarter, and on Friday it will publish its monthly jobs survey.
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Both reports will give investors a better idea about the strength of the economy and what's next for the Federal Reserve's stimulus program. Investors will hear from the Fed on Wednesday after the central bank winds up a two-day policy meeting. The Fed's stimulus has been a major factor supporting a four-year rally in stocks.
The Standard & Poor's 500 index dropped 6.32 points, or 0.4 percent, to 1,685.33.
Seven of the 10 sectors in the index fell. The declines were led by energy companies and banks.
The benchmark index is still up 4.9 percent in July, and the S&P 500 is on track to have its best month since January. The index jumped this month, climbing to an all-time high July 22, after Fed Chairman Ben Bernanke assured investors that the Fed wouldn't cut its stimulus before the economy was ready. The central bank is buying $85 billion a month to help keep interest rates low and encourage borrowing and hiring.
Stocks may struggle to add to their gains, given that expectations for the economy remain modest, said Scott Wren, a senior equity strategist at Wells Fargo Advisors.
The U.S. economy is forecast to have grown just 0.5 percent in the second quarter, according to data provider FactSet. That would be slower than the 1.8 percent annual rate the economy expanded at in the first three months of the year.
"I don't think you're going to see the market sustain much higher levels than this," said Wren. "All this data is going to show that we are slowly improving, but it's a slow process and there's not much to get excited about."
A trio of corporate deals caught investors' attention Monday but failed to ignite the broader market.
Saks jumped after Canadian retailer Hudson's Bay, the parent company of Lord & Taylor, agreed to buy the luxury store operator for $2.4 billion, or $16 a share. Saks rose 64 cents, or 4.2 percent, to $15.95.
Interpublic Group, a big advertising company, gained after Omnicom Group, another big advertiser, agreed to combine with France's Publicis Groupe to create the world's largest advertising company. Interpublic rose 74 cents, or 4.7 percent, to $16.61.