Stocks Pull Back From Record Highs and Dollar Falls…..

U.S. stocks closed lower after a several week run that brought U.S. equities back into record high territory. The pullback came on a quiet day from a headline perspective as the markets shrugged off some largely encouraging earnings reports before ending lower. The downward move came ahead of a busy week set to yield more earnings data as well as a handful of key economic reports that the market will be watching closely. The U.S. dollar saw a sizeable drop which extended a retracement of the strong gains seen in Q1, while Treasuries dipped, nudging yields higher. Crude oil prices were modestly higher, and gold slipped. Dow member Coca-Cola topped quarterly expectations, along with Harley-Davidson which also raised its guidance, as earnings season began to gain steam, while the economic calendar was void of any major releases today. Despite the strong earnings reports, most sectors were lower as the Consumer Discretionary and Information Technology sectors noticeably trailed. Asia and Europe diverged, amid some apparent caution as the global markets have rallied to record highs. The global markets continued to grapple with the 2021 optimism, along with rising COVID-19 cases in Asia, ahead of a busy week of data that will be highlighted by the monetary policy decision from the European Central Bank and manufacturing and services sector reports.

The Dow Jones Industrial Average fell 123 points (0.4%) to 34,078, the S&P 500 Index decreased 22 points (0.5%) to 4,163, and the Nasdaq Composite was down 138 points (1.0%) at 13,915. In moderate volume, 856 million shares were traded on the NYSE and 4.3 billion shares changed hands on the Nasdaq. WTI crude oil gained $0.24 to $63.43 per barrel. Elsewhere, the Bloomberg gold spot price was $5.64 lower at $1,770.88 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—fell 0.5% to 91.10.

Treasury yields tick higher, U.S. dollar falls as week begins…..

Treasuries dipped as the economic calendar was void of any major releases today, as the yield on the 2-year note was little changed at 0.16%, while the yield on the 10-year note ticked 2 basis points (bps) higher to 1.60%, and the rate on the 30-year bond increased 3 bps to 2.29%.

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