Stock Market Today: Stocks Slip in Sloppy Start to the Week

The Dow and S&P 500 came off their all-time highs Monday despite still-optimistic data coming out of the Q1 earnings slate.

A bear eats a fish that's swimming upstream
(Image credit: Getty Images)

The major indexes took a step back Monday from their recent gains despite very little in the way of negative news and several encouraging earnings reports.

Coca-Cola (KO, +0.6%) topped Q1 profit and revenue estimates, reporting that global case volumes have returned to 2019's pre-pandemic levels. Harley-Davidson (HOG, +9.7%) also shattered expectations, upgrading 2021 revenue expectations to a 30%-35% bounce off 2020's levels (from 20%-25% previously).

One possible drag on the market, says LPL Financial chief market strategist Ryan Detrick, is too-high investor sentiment.

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%
https://cdn.mos.cms.futurecdn.net/flexiimages/xrd7fjmf8g1657008683.png

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of Kiplinger’s expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of Kiplinger’s expert advice - straight to your e-mail.

Sign up

"Excessive optimism can open the door for contrarian sellers to weigh on prices," he says. "When we upgraded our view on equities to overweight in late March 2020, one of the main reasons was the overriding sentiment backdrop of extreme pessimism that we felt limited the opportunity for further selling.

"This time around, many of our favorite sentiment gauges are becoming extremely bullish, which could be a near-term contrarian warning."

The Dow Jones Industrial Average (-0.4% to 34,077) and S&P 500 (-0.5% to 4,163) both fell from Friday's all-time highs.

Enjoying our market recap? Receive it in your inbox every day by signing up for Kiplinger's FREE Closing Bell e-letter.

Also heading lower was the Nasdaq Composite (-1.0% to 13,914), weighed down in part by Tesla (TSLA, -3.4%). The electric vehicle maker sagged after the fatal weekend crash of a 2019 Model S; police say no one was in the driver's seat when the vehicle collided with some trees.

Other action in the stock market today:

  • The Russell 2000 dropped 1.4% to 2,232.
  • U.S. crude oil futures improved by 0.4% to settle at $63.38 per barrel.
  • Gold futures declined 0.5% to $1,770.60 per ounce.
  • The CBOE Volatility Index (VIX) spiked by 7.8% to 17.52.
  • Bitcoin prices fell off a ledge, declining 9.3% to $56,079. That actually represented a recovery off its weekend lows below $54,000, as it joined a number of other digital currencies that suffered sharp declines on Saturday and Sunday. (Bitcoin and Dogecoin trade 24 hours a day; prices reported here are as of 4 p.m. each trading day.)

Dividend Growth: The Path to Superior Returns

This earnings season, keep your eye on companies that up the ante on their regular dividend payments.

Why? Well, historically speaking, the companies that do so are going to be among your greatest drivers of portfolio performance. The American Association of Individual Investors, citing decades' worth of data from Ned David Research and Hartford Funds, notes that between 1972 and 2019, "stocks with rising dividends greatly outpaced the dividend cutters or non-dividend-paying stocks."

Companies in the S&P 500 that either started or grew their payouts returned 12.87% annually – better than dividend payers who kept their distributions level (11.85%), dividend cutters (10.88%) and companies that didn't pay a dividend at all (8.57%).

Fortunately, the market is chock-full of dividend growers from here and abroad. The Canadian Dividend Aristocrats and European Dividend Aristocrats, for instance, provide decent avenues to secure both decent yields and geographical diversification.

But the standard-bearers for dividend growth remain the S&P 500 Dividend Aristocrats, which must achieve at least 25 consecutive years of annual payout growth. If you're not familiar with the Aristocrats, or want to find out which companies have been added to the list this year, check our updated list of dividend royalty.

Kyle Woodley
Senior Investing Editor, Kiplinger.com

Kyle is senior investing editor for Kiplinger.com. As a writer and columnist, he also specializes in exchange-traded funds. He joined Kiplinger in September 2017 after spending six years at InvestorPlace.com, where he managed the editorial staff. His work has appeared in several outlets, including U.S. News & World Report and MSN Money, he has appeared as a guest on Fox Business Network and Money Radio, and he has been quoted in MarketWatch, Vice and Univision, among other outlets. He is a proud graduate of The Ohio State University, where he earned a BA in journalism.