U.S. Stocks Mixed ahead of Big-Tech Earnings; Housing Slowdown Worsens

The Dow and broader U.S. stock market struggled for direction on Monday, as earnings-related anxiety and weak economic data kept investors on the sidelines. Activity is expected to pick up later this week as first-quarter earnings season continues.

Dow Drops; S&P 500 Pares Gains

After losing more than 100 points, the Dow Jones Industrial Average pared its losses by the close, finishing down 48.49 points, or 0.2%, to 26,511.05. The blue-chip index gained 0.6% last week, where it came to within 400 points of a new all-time high.

The much broader S&P 500 Index of large-cap stocks pared gains to settle at 2,907.97, where it was up 0.1%. Energy stocks surged 2.1% but were offset by sizable losses across most sectors.

The technology-driven Nasdaq Composite Index settled with a gain of 0.2% to close at 8,015.27.

Corporate earnings will dominate the headlines this week, with Amazon.com Inc. (AMZN), Facebook Inc. (FB) and Microsoft Corp (MSFT) all scheduled to report.

Oil Prices Surge

Energy stocks followed oil prices higher on Monday amid reports that the U.S. State Department was looking to end sanctions relief on buyers of Iranian crude. Some of the biggest buyers of Iranian crude include China, Japan, South Korea, India and Turkey. These countries had previously been allowed to keep buying Iranian crude without fear of U.S. sanctions.

The West Texas Intermediate (WTI) benchmark for U.S. crude futures shot up $1.59, or 2.5%, to $65.65 a barrel on the New York Mercantile Exchange. That’s the highest level in six months. Brent crude, the international futures benchmark, climbed $2.15, or 3%, to $74.12 a barrel.

Housing Slowdown Worsens

The sale of previously-owned homes fell faster than expected last month, highlighting a pervasive supply-demand mismatch in the U.S. housing sector.

Existing home sales, which account for the large majority of the real estate market, fell 4.9% in March to a seasonally adjusted annual rate of 5.21 million, the National Association of Realtors (NAR) reported Monday. Compared to a year ago, sales are down 5.4%.

“It is not surprising to see a retreat after a powerful surge in sales in the prior month. Still, current sales activity is underperforming in relation to the strength in the jobs markets. The impact of lower mortgage rates has not yet been fully realized.” – NAR chief economist Lawrence Yun

Home sales are in a multi-year downtrend, stoked by rising interest rates and a growing affordability gap, especially among first-time buyers. There’s growing optimism that sales will pick up soon now that the Federal Reserve has paused its tightening cycle. The Fed’s benchmark rate impacts mortgage rates indirectly as banks pass on the higher costs of lending to their customers.

Featured image courtesy of Shutterstock. Charts via Stockcharts.com and Barchcart.com.

Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi