US stocks ended a choppy session lower on Monday as investors grew nervous ahead of 3Q 2021 earnings reporting season.
The Dow Jones Industrial Average fell 250.19 points or 0.72% to 34,496.06, the S&P 500 lost 30.15 points or 0.69% to 4,361.19 and the Nasdaq Composite dropped 93.34 point, or 0.64% to 14,486.20.
Supply chain problems and higher costs for energy and other industries have fuelled concern about earnings which are set to kick off with JPMorgan Chase & Co results on Wednesday.
Indexes reversed early gains after midday and added to losses just before the close. JPMorgan shares were down 2.1% and among the biggest drags on the S&P 500 along with Amazon.com which fell 1.3%. The S&P financial index was down 1% while communication services dropped 1.5%.
“The market is a bit cautious going into this earnings season,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. “Supply chain issues may have impacted earnings for a number of companies and certain industries more than others.”
While another period of strong US profit growth is forecast for Corporate America, earnings are shaping up to be crucial for investors worried about how supply disruptions and inflation pressures will affect bottom lines.
That could lead to more volatility on Wall Street following a bruising September. Analysts expect a 29.6% year-over-year increase in profit for S&P 500 companies in the third quarter, according to IBES data from Refinitiv as of Friday.
The energy sector also ended lower after hitting its highest since January 2020 earlier in the day. Higher oil prices have fed into concerns about rising costs for businesses and consumers.
Volume on US exchanges was 8.15 billion shares compared with the 10.9 billion average for the full session over the last 20 trading days.
Trading may have been slower due to the US federal holiday Monday with US bond markets shut for the day.
Among individual stocks, Southwest Airlines Co fell 4.2% on a report that it cancelled at least 30% of scheduled flights on Sunday (Oct 10). – Oct 12, 2021
