Wall Street Close: Dull start to the week amid downbeat data, covid concerns

• US equities post minor losses to kick-start the week, Treasury yields close the lowest since February.
• Escalating virus woes, softer prints of US ISM PMI and deadlock over infrastructure spending weigh on sentiment.
• Company news from Square, ON Semiconductors and Tesla couldn’t save the bulls.

US shares kick-start the week on a back foot as the coronavirus woes take a toll on the global sentiment and drag economics of late. The fears get firmer as policymakers in the Senate jostle over the much-awaited stimulus and the earnings calendar is less interesting.

In addition to equities, bond yields were also pressured on Monday. The benchmark 10-year Treasury yields dropped six basis points (bps) to 1.179%, the lowest closing since February.

Read: Forex Today: Dollar weak ahead of first-tier events

That said, Dow Jones Industrial Average (DJI) shed 0.28% or 97 points to 34,838 whereas S&P 500 declined 0.19% daily to close around 4,387. It should, however, be noted that downbeat Treasury yields helped tech-heavy Nasdaq to defend bulls with 0.06% gains on a day to close near 14,681.

US ISM Manufacturing PMI for July dropped below 60.9 forecasts and 60.6 prior to 59.5. While the soft figures do push for easy money the fears that the Delta covid variant challenges the economic recovery seemed to have favored market bears. Also on the negative side was the warning from the US Centers for Disease Control and Prevention (CDC), per Reuters, that the Delta variant is “likely more severe” than earlier versions of the virus. It’s worth mentioning that the US Treasury’s forecast of lesser bond demand, likely due to the Japanese pension fund’s cut in the US bond weight, also added to the downside factors.

The company-specific news was also mixed as Square’s announcement to acquire Australia’s Afterpay offered it over 10.0% upside while Tesla rose around 3.0% after cutting the price in China. Further, ON Semiconductors’ strong results propelled the stock near 12.0% but the same can’t be true for Global Payments that slumped 11% despite posting upbeat earnings and raising full-year 2021 forecasts.

Looking forward, virus updates will join the developments over US President Joe Biden’s infrastructures spending plan to entertain the market players. Additionally, earnings from General Motors, Eli Lilly and CVS Health Corporation will be the key to follow.