By Stephen Culp
NEW YORK (Reuters) - U.S. stocks closed lower on Monday, with few catalysts to sway investor sentiment as they approach the half-way point of a year in which the equity markets have been slammed by heightened inflation worries and tightening Fed policy.
The major U.S. stock indexes lost ground after oscillating earlier in the session, with weakness in interest rate sensitive megacaps such as Amazon.com, Microsoft Corp and Alphabet Inc providing the heaviest drag.
"The reason for lack of direction this week and next week is investors are looking for what’s going to happen in the second quarter reporting period," said Sam Stovall, chief investment strategist of CFRA Research in New York.
All three indexes are on course to notch two straight quarterly declines for the first time since 2015. They also appear set to post losses for June, which would mark three consecutive down months for the tech-heavy Nasdaq, its longest losing streak since 2015.
The S&P was on track to report its fifth worst year-to-date price decline since 1962 as of Friday, Stovall said.
"Every time the SPX rose by more than 20% in a year it fell by an average of 11% starting relatively early in the new year. And all years where the decline started in the first half got back to break even before the year was out."
"No guarantee that’s going to happen this year, but the market could surprise us to the upside," Stovall said.
Rising oil prices helped put energy stocks out front, with economically sensitive smallcaps and semiconductors and transports also outperforming the broader market. [O/R]
Economic data surprised to the upside, with new orders for durable goods and pending home sales beating expectations and adding credence to U.S. Federal Reserve Chairman Jerome Powell's assertion that the economy is robust enough to withstand the central bank's attempts to rein in decades-high inflation without sliding into recession.
The Dow Jones Industrial Average fell 62.42 points, or 0.2%, to 31,438.26, the S&P 500 lost 11.63 points, or 0.3%, to 3,900.11 and the Nasdaq Composite dropped 93.05 points, or 0.8%, to 11,514.57.
Among the 11 major sectors of the S&P 500, eight ended the session in negative territory, with consumer discretionary suffering the largest percentage loss. Energy stocks were the clear winners, gaining 2.8% on the day.
With several weeks to go until second-quarter reporting commences, 130 S&P 500 companies have pre-announced. Of those, 45 have been positive and 77 have been negative, resulting in a negative/positive ratio of 1.7 stronger than the first quarter but weaker than a year ago, according to Refinitiv data.
In extended trading, Robinhood Markets fell 4% after FTX's Sam Bankman-Fried said his cryptocurrency exchange was in no active M&A conversations with the retail stock trading platform.
In the earlier trading session, Robinhood had jumped 14% after Bloomberg reported that FTX was exploring a deal.
During Monday's session, Coinbase Global Inc dropped over 10% after Goldman Sachs downgraded that cryptocurrency exchange to "sell" from "buy".
Advancing issues outnumbered declining ones on the NYSE by a 1.17-to-1 ratio; on Nasdaq, a 1.02-to-1 ratio favored decliners.
The S&P 500 posted one new 52-week high and 29 new lows; the Nasdaq Composite recorded 24 new highs and 84 new lows.
Volume on U.S. exchanges was 10.91 billion shares, compared with the 12.95 billion average over the last 20 trading days.
(Reporting by Stephen Culp; additional reporting by Shreyashi Sanyal and Amruta Khandekar in Bengaluru, and by Noel Randewich in Oakland, Calif.; editing by Grant McCool)