Investing.com -- U.S. stocks fell slightly, as hawkish comments by key Federal Reserve policymakers on the potential for multiple rate hikes this year outweighed a surge in technology and semiconductor, which received a lift on Monday from a strong performance by Apple Inc (NASDAQ:AAPL).
The Dow Jones Industrial Average fell 8.01 or 0.05% to 17,492.93, while the NASDAQ Composite index lost 3.78 or 0.08% to 4,765.78, closing on Monday near session-lows. The S&P 500 Composite index, meanwhile, dipped 4.28 or 0.21% to 2,048.04, as eight of 10 sectors closed in the green. Stocks in the Utilities, Telecommunications and Consumer Services industries lagged, each losing more than 0.3% on the session. Stocks in the Basic Materials sector led, as Monsanto Company provided a boost to the industry after revealing the financial terms of a potential $62 billion merger with (DE:BAYGN.
Speaking at a conference in Beijing on Monday, Federal Reserve Bank of St. Louis president James Bullard emphasized that he sees more factors in favor of a series of slow rate increases than no hikes at all, as the Federal Open Market Committee (FOMC) prepares for a critical interest rate decision in three weeks. Meanwhile, San Francisco Fed president John Williams said at an appearance in New York that he thinks it could be appropriate to raise interest rates two to three times this year, followed by another three to four times in 2017, as the Fed continues to explore plans to tighten its monetary policy cycle. Any rate hikes this year are viewed as bearish for equities, as investors look to capitalize on higher yields from less risky investments such as government bonds.
The top performer on the Dow was EI du Pont de Nemours and Company (NYSE:DD), which added 0.96 or 1.46 to 66.71. DuPont shares rose considerably on Monday, amid speculation that the Monsanto (NYSE:MON) deal could limit choices for farm suppliers leading to price increases for DuPont and others in the industry. Last month, DuPont said it expects the U.S. Securities and Exchange (SEC) Commission's review of its $130 billion acquisition of Dow Chemical Company (NYSE:DOW) to be completed by late-June. If the Monsanto deal is approved by federal regulators, it could mark the third major consolidation in the agriculture industry over the last six months. In February, ChemChina acquired Swiss seed giant Syngenta AG (NYSE:SYT) in a proposed $43 billion transaction.
The worst performer was Microsoft Corporation (NASDAQ:MSFT), which lost 0.60 or 1.19% to 50.03. Microsoft (NASDAQ:MSFT) finished just below Verizon Communications Inc (NYSE:VZ), which fell 0.51 or 1.03% to 49.15. Last week, speculation intensified that the major wireless company could raise its bid for YHOO's brand and core internet assets. Analysts believe the long-awaited sale of Yahoo (NASDAQ:YHOO) could reach as high as $8 billion.
The biggest gainer on the NASDAQ was Incyte Corporation (NASDAQ:INCY), which added 3.05 or 3.93% to 80.70 amid strong P/E valuations, which suggests the potential for higher growth in the near future. Shares in Apple also rose 1.20 or 1.26% to 96.42, due in part to increased demand expectations for the company's iPhone 7 brand. During a goodwill tour in India, Apple CEO Tim Cook noted the technology giant will not lower its "quality bar," in response to higher duties and taxes on its products throughout the country. The worst performer was Chinese e-commerce Jd.Com Inc Adr (NASDAQ:JD), which fell 0.58 or 2.45% to 22.88.
Monsanto soared 4.94 or 4.87% to close the session as the top performer on the S&P 500. Under the deal, Bayer would pay Monsanto shareholders $122 per share, representing a 37% premium over the stock price earlier this month before the German pharmaceutical company made its takeover attempt. The worst performer was Roper Technologies Inc (NYSE:ROP), which plummeted 10.34 or 5.67% to 172.71.
On the New York Stock Exchange, declining issues outnumbered advancing ones by a 1,541-1,499 margin.