Investing.com – Investors returned from the July 4 weekend and didn't like what they saw from Apple and Boeing and thought they saw from the Federal Reserve.
The result was a second day of declines after the market's record-setting close on Wednesday. The S&P 500 fell 0.5%. The Dow dropped 0.4%, and the Nasdaq Composite slid 0.8%. The Nasdaq 100, dominated by big tech stocks, was down 0.7%.
Apple (NASDAQ:AAPL) was a prime culprit, falling more than 2% on a downgrade. Boeing (NYSE:BA) dropped 1.3% after a Saudi Arabian airline cancelled orders for 30 737 Max jetliners. Together, they represented nearly 61 points of the Dow's 116-point decline.
The market was also in a worrying mood about whether the Fed will cut rates at its July 30-31 meeting. Friday's jobs report, which showed non-farm payrolls growing by a larger-than-expected 224,00 jobs, raised fears that the Fed might not cut rates after all. Investing.com's Fed Rate Monitoring Tool still sees the Fed cutting its key federal funds rate from 2.25%-2.5% to 2%-2.25%.
Interest rates did move lower on the day. The 10-year Treasury yield fell to 2.034% from 2.048% on Friday.
The Fed has said it stands ready to cut rates to support the economic recovery. Chairman Jerome Powell will testify before Senate and House committees on Wednesday and Thursday and will be questioned closely on the point. President Trump has criticized the central bank and demanded rates cuts.
Chipotle Mexican Grill (NYSE:CMG), Costco Wholesale (NASDAQ:COST) and Walmart (NYSE:WMT) were among stocks that hit new highs. Nike (NYSE:NKE), Procter & Gamble (NYSE:PG) and Home Depot (NYSE:HD) were the top three Dow performers, followed by Walmart.
Gold prices were flat on the day, with the August contract on NYMEX settling down 10 cents to $1,400. Oil prices were mixed. West Texas Intermediate crude oil settled up 15 cents to $57.66 a barrel. Brent crude fell 12 cents to $64.11. The American Automobile Association's Daily Fuel Gauge Report said regular unleaded gas averaged $2.753 a gallon, little changed from Friday but up 21.5% on the year.
With interest rates slipping, real estate and utilities stocks were the market leaders. Tech stocks were among the weaker sectors, but materials stocks were the laggards.
Third-quarter earnings will start to come in this week, with PepsiCo (NASDAQ:PEP) reporting before Tuesday's open and Delta Air Lines (NYSE:DAL) issuing its report before Thursday's open.
S&P 500 winners and losers
Signet Jewelers (NYSE:SIG), Edison International (NYSE:EIX) (the parent of Southern (NYSE:SO) California Edison) and chipmaker Western Digital (NASDAQ:WDC) were among the top S&P 500 performers.
IPG Photonics (NASDAQ:IPGP), healthcare provider DaVita Inc . (NYSE:DVA) and financial-services company Navient (NASDAQ:NAVI) were among the weakest S&P 500 performers.