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Market Snapshot: Dow Pares Raises Over 35,000, Nasdaq Slips 2.2% as Social Media Shares Faint

The Dow Jones Industrial Average hit a milestone at 35,000, marking the latest in a series of all-time highs on Monday as the broader market saw mixed performance. The tech-heavy Nasdaq Composite fell sharply as high-profile big tech stocks fell.

What do major indices do?

The Dow
DJIA,
+ 0.23%
rose by 230 points or 0.7% to 35,007, surpassing the 35,000 level for the first time.

The S&P 500
SPX,
-0.75%
was down 7 points to around 4,225.

The Nasdaq Composite
COMP,
-2.32%
decreased 221 points, or 1.6%, to about 13,529.

On Friday, stocks shook off a much weaker-than-expected April job report. The Dow and S&P 500 both ended at record highs while the Nasdaq Composite outperformed its key benchmark peers but still posted a weekly loss.

What is driving the market?

Stocks were mixed on Monday afternoon as a blockbuster earnings season came to an end and investors weighed up how much of the economic rebound was already being priced into stocks.

"Our point of view is that there are many stocks that are extremely stretched in terms of ratings," said Sandi Bragar, executive director at Aspiriant, an asset management firm.

Bragar isn't concerned about the pace of economic recovery or a withdrawal of central bank monetary support this year, but she is concerned that financial markets may be prepared for much higher volatility given "low bond yields and such high stocks" , "What we haven't seen that often this year."

According to analysts, April's disappointing April jobs report, which saw the number of non-farm workers in the US rise by 266,000 from a consensus forecast of 1 million, continued to provide a positive backdrop for stocks.

Read: Here's why the Dow and S&P 500 hit records despite a poor job report in April

"In our view, the job report shows a surprising pause in the labor market recovery at a time when underlying fundamentals and alternative data are pointing to acceleration," Credit Suisse analysts write in a note.

"Still, this report should postpone any discussion of housing deprivation until there is a decisive recovery in the labor market," they said. "Therefore, we continue to expect positive equity returns, albeit at the expense of increased short-term volatility."

See: Weak jobs report the US recovery is underway – but are international stock markets a better choice now?

Investors followed developments related to a cyberattack on a key pipeline that provides around 45% of the fuel consumed on the east coast. Georgia-based Colonial Pipeline announced over the weekend that it has closed the pipeline after being the target of a ransomware attack. On Monday, Colonial said the goal was to "substantially" restore operations by the end of the week.

Raw material corner: That means shutting down the colonial pipeline for gas prices and the energy markets

Gasoline futures
RB00,
+ 0.23%
were up 0.4% recently. According to analysts, pump prices can prevent spikes if operations are restored within a few days. Colonial said Monday it aims to substantially restore operational service by the end of the week. Oil futures rose in afternoon trading as concerns remain that the incident could cool short-term demand for crude oil.

Tech and other growth-oriented stocks, which are expected to grow faster than their peers, were buoyed on Friday as employment data sparked a decline in government bond yields. However, those stocks fared significantly worse on Monday, and some of the largest tech companies took significant losses.

Shares of Facebook Inc.
FB,
-4.28%
fell 3.8% while Google parents Alphabet Inc.
Aco,
-2.43%

TogetL,
-2.51%
Shares fell 1.9% after Citibank analyst Jason Bazinet cut his ratings on both from buy to neutral.

Among other tech heavyweights, Apple Inc.
AAPL,
-2.49%
Stocks fell 1.6%; Netflix Inc.
NFLX,
-2.63%
fell 2%; and Tesla Inc.
TSLA,
-5.47%
fell 5.3%.

Have to know: This is the "greatest threat" to big tech dominance in the S&P 500, according to Goldman

The yield on the 10 year Treasury bill
TMUBMUSD10Y,
1,599%
rose 3 basis points to 1.60% on Monday. Yields and bond prices are moving in opposite directions.

In the meantime, a strong winning season was drawing to a close.

According to FactSet, 88% of the S&P 500 companies had reported first quarter profits by Friday. The index is now reporting its highest earnings growth since the first quarter since 2010 year over year, John Butters, senior earnings analyst at FactSet, said in a note.

Analysts also expect double-digit earnings growth for the remaining three quarters of 2021. These above-average growth rates are due to a combination of higher profits for 2021 and an easier comparison with unusually weak profits in 2020 due to the negative effects of COVID-. 19 across numerous industries, Butters said.

Which companies are in focus?

Trade Desk Inc..
TTD,
-27.22%
Shares fell 26% on Monday after the ad-buying services provider reported better-than-expected earnings and revenue in the first quarter and announced a 10-for-1 stock split.

Share of Chipotle Mexican Grill Inc..
CMG,
-2.30%
declined 1.6% after the company outlined wide-ranging compensation incentives, including increasing the hourly wages for crew members to $ 11-18 per hour.

American depository receipts for BioNTech SE
BNTX,
+ 6.84%
rose 7.7% after the German biotech company, which worked with Pfizer Inc. to develop the first COVID-19 vaccine to receive regulatory approval.
PFE,
+ 1.01%,
reported an increase in sales on Monday.

U.S. Foods Holding Corp.
USFD,
-2.61%
reported profits and revenues exceeding projections, saying they would not provide guidance due to uncertainties related to pandemics. The shares fell 3%.

Shares of Energizer Holdings Inc.
ENR,
-0.22%
rose 0.5% after the battery maker delivered results that exceeded Wall Street projections.

Marriott International Inc.
TO DAMAGE,
-3.52%
Shares fell 3.1% after the hotel operator announced earnings that exceeded estimates but failed to generate earnings.

Shares of Tyson Foods Inc.
TSN,
-0.22%
fell 0.5% after the protein maker reported second-quarter earnings and sales that exceeded expectations.

What are other markets doing?

The ICE US dollar index
DXY,
-0.03%,
A measure of the currency versus a basket of six major competitors was down 0.1%.

Oil futures barely changed as the US benchmark traded near $ 64.97 a barrel. Gold futures
GC00,
+ 0.28%
closed slightly higher, rising 0.3% to $ 1,837.60 an ounce.

The Europe-wide Stoxx Europe 600
SXXP,
+ 0.10%
closed 0.1% while London's FTSE 100
UKX,
-0.08%
gave up 0.1%. In Asia, the Hang Seng Index in Hong Kong
HSI,
-0.05%
fell 0.1% while the Japanese Nikkei 225
NIK,
+ 0.55%
rose 0.5% and the Shanghai Composite
SHCOMP,
+ 0.27%
gained 0.3%.

The focus was on crypto assets, with parody coin dogecoin
DOGEUSD,
-16.29%
After broadcasting a highly hyped episode of "Saturday Night Live," hosted by Elon Musk, CEO of Tesla, it plummeted. ether
ETHUSD,
+ 6.47%
However, coins running on the Ethereum blockchain have traded near records above $ 4,000.

Check out: What the Dogecoin Army Says As Cryptocurrency's Fall Triggers A Bearish Break In Long-Term Trendline

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