U.S. Stocks Fail To Hold Early Gains, End On Mixed Note

U.S. stocks failed to hold gains and ended on a mixed note on Monday as the mood turned cautious past mid afternoon after some Fed officials said the central bank will have to keep raising rates.

Technology stocks outperformed as bond yield dropped amid bets the Federal Reserve will slow its pace of policy tightening after data showed a drop in wage growth and a contraction in U.S. service sector activity.

Stocks pared gains after comments from a couple of Fed officials that the central bank might raise rates to somewhere above 5%.

Among the major averages, the Dow, which rallied more than 300 points to 33,935.11, ended down 112.96 points or 0.34 percent at 33,517.65, and the S&P 500 settled lower by 2.99 points or 0.08 percent at 3,892.09, easing from a high of 3,950.57. The Nasdaq settled with a gain of 66.36 points or 0.63 percent at 10,635.65, well off the session’s high of 10,807.26.

Salesforce.com gained about 4.7 percent. Intel gained 2 percent. Goldman Sachs, Microsoft, Walt Disney and Cisco Systems posted moderate gains.

Tesla shares climbed nearly 6 percent. The electric vehicle maker has indicated longer waiting times for some versions of the Model Y in China, presumably due to recent price cuts.

Merck drifted down nearly 4 percent. J&J, Travelers Companies, Amgen and Boeing ended lower by 2 to 2.6 percent. Verizon, Walmart and P&G also ended notably lower.

Investors look ahead to release of a report on consumer price inflation on Thursday. The report, which is expected to show a notable slowdown in the annual rate of consumer price growth, could have a significant impact on the outlook for interest rates.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan’s Nikkei 225 Index climbed by 0.6 percent, while Hong Kong’s Hang Seng Index jumped by 1.9 percent.

European markets closed higher, as optimism surrounding China’s reopening and expectations of slower interest rate hikes by the U.S. Federal Reserve.

Data showing Germany’s industrial production recovering at a faster than expected pace in November, and a report showing an improvement in Eurozone investor confidence helped as well.

The pan European Stoxx 600 climbed 0.88 percent. The U.K.’s FTSE 100 gained 0.33 percent, Germany’s DAX surged 1.25 percent, and France’s CAC ended higher by 0.68 percent.

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