Equities Cautious to Kick Off a New Week…..

U.S. stocks closed mixed in narrow, rangebound trading, as the markets got off to a cautious start for the new week. Much of the trepidation appeared to focus on the ongoing uncertainty of the continued spread of the Delta variant of coronavirus, which has seen cases of COVID-19 in the U.S. steadily rise. Meanwhile, investors watched closely for signs of progress on a trillion dollar infrastructure spending package with the Senate set to vote this week on the bill, and continued to assess last Friday’s stronger-than-expected nonfarm payroll report. The Health Care and Consumer Staples sectors led the way, while Energy and Information Technology issues were notable laggards. M&A news dominated the equity front, as Sanderson Farms agreed to be acquired by Cargill and Continental Grain for about $4.5 billion, Brookfield Asset Management Reinsurance Partners announced a deal to acquire American National Group for approximately $5.1 billion, and Draft Kings agreed to acquire Golden Nugget Online Gaming for about $1.56 billion. The economic week began with another record high in job openings. Treasuries dipped to modestly lift rates, the U.S. dollar added to Friday’s rise, while Crude oil and gold prices took a tumble. Asia finished mixed in the wake of China data that showed softer-than-expected trade activity and hotter-than-expected inflation statistics, though volume was lighter than usual as Japan was closed for a holiday. Europe traded mixed as sector activity also suggested a defensive tilt.

The Dow Jones Industrial Average lost 107 points (0.3%) to 35,102, the S&P 500 Index shed 4 points (0.1%) to 4,432, while the Nasdaq Composite decreased 24 points (0.2%) to 14,860. In moderate volume, 737 million shares were traded on the NYSE and 4.0 billion shares changed hands on the Nasdaq. WTI crude oil moved $1.80 lower to $66.48 per barrel. Elsewhere, the gold spot price plunged $36.60 to $1,726.50 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—rose 0.2% to 92.97.

As labor shortage remains a drag on business sentiment, the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS), a measure of unmet demand for labor, showed a record high of 10.07 million jobs were available to be filled in June, versus the Bloomberg forecast calling for 9.27 million jobs and May’s upwardly-revised 9.48 million level. The report showed the hiring rate rose to 4.6% from May’s 4.2% pace, and separations also increased to 3.8% from the prior month’s 3.7% pace. The quit rate also grew to 2.7% from 2.5%.

Treasuries turned lower following the jobs report, as the yield on the 2-year note rose 1 basis point (bp) to 0.22%, the yield on the 10-year note increased 3 bps to 1.32%, and the rate on the 30-year bond added 2 bps to 1.96%.

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