Stock Market Today: Dow Stumbles After Sprinting Out of the Blocks

Weak economic data sent the Dow and S&P 500 to small losses on Monday, though the Nasdaq managed a marginal gain.

A businessman is on the ground after slipping on a banana peel.
(Image credit: Getty Images)

Stocks were on pace for a broadly positive session Monday, but they ended up turning in a mixed performance by the close as investors chewed on a number of headlines.

Over the weekend, the Senate unveiled the full text of a roughly $1 trillion bipartisan infrastructure bill, helping provide a lift in today's early trade, including for a number of infrastructure-related picks (opens in new tab).

But things turned after the open amid a few economic data releases. While a US Markit purchasing manager's index reading for July showed that manufacturing activity grew at its fastest pace in 14 years, another gauge, from the Institute for Supply Management, showed growth in American manufacturing cooling off a little last month.

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Also, construction spending improved in June, but only by 0.1% month-over-month, less than economists expected.

"That said, there were upward revisions to the data starting with April, leaving the average level of spending in Q2 broadly in line with expectations," says Barclays economist Pooja Sriram. "The rebound in June came from the residential sector as expected, which rose 1.1% m/m."

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The Nasdaq Composite managed to finish with an a marginal gain to 14,681 thanks to a strong move by Tesla (TSLA (opens in new tab), +3.3%), as well as semiconductor stocks (opens in new tab) such as Advanced Micro Devices (AMD (opens in new tab), +2.3%) and Nvidia (NVDA (opens in new tab), +1.3%). But the Dow Jones Industrial Average finished with a 0.3% dip to 34,838, and the S&P 500 declined 0.2% to 4,387.

Other news in the stock market today:

  • The small-cap Russell 2000 fell 0.5% to 2,215.
  • Square (SQ (opens in new tab)) stock had quite the day. The company unexpectedly unveiled its second-quarter earnings report – which showed the fintech firm (opens in new tab) took in better-than-expected adjusted earnings of 66 cents per share on lower-than-anticipated revenues of $4.7 billion – ahead of schedule, reporting Sunday rather than the scheduled Wednesday release. Square also said it is buying Australian "buy now, pay later" company Afterpay (AFTPY (opens in new tab), +35.2%) for $29 billion in stock. SQ stock ended the day up 10.2%.
  • Electric vehicle (EV) stocks (opens in new tab) got a lift after several Chinese firms reported impressive July delivery numbers. Specifically, Li Auto (LI (opens in new tab), +0.9%) and Nio (NIO (opens in new tab), +2.6%) delivered 8,589 and 7,931 vehicles, respectively, last month – both figures up 125% year-over-year. Meanwhile, XPeng (XPEV (opens in new tab), +7.1%) delivered 8,040 vehicles over the same time frame, a 228% improvement from the year-ago period.
  • U.S. crude oil futures plunged 3.6% to end at $71.26 per barrel.
  • Gold futures rose 0.3% to settle at $1,822.20 an ounce.
  • The CBOE Volatility Index (VIX) jumped 6.7% to 19.46.
  • Bitcoin declined 1.4% over the weekend to $39,172.80. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)

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(Image credit: YCharts)

It's Not Time to Get Complacent

Welcome to August … a not terribly pleasant month for equity investors. Says Ryan Detrick, chief market strategist for LPL Financial:

"The good news is stocks are still firmly in a bull market, but the bad news is the calendar is a potential worry now. August and September have been historically two of the weakest months of the year. In fact, during a post-election year, August has been historically quite poor, with only February worse on average.

"Turning to September, it has indeed been historically the worst month of the year on average. Don’t forget that last year stocks saw nearly a 10% correction during this troublesome month."

But rather than bracing for impact, Detrick appears cheerful.

"With the economy rebounding and earnings soaring," he says, "should we see any seasonal weakness, we'd use that as an opportunity to add to core equity positions."

Any dip would naturally make any value stock look even more economically priced – thus, it's a perfect chance to swoop in on these 16 value-minded picks (opens in new tab), or these 11 growth-at-a-reasonable-price (GARP) stocks (opens in new tab). Or, you could use a downturn to get stock pickers' favorites at more attractive levels. If you're not the type to sweat the coming robopocalypse, these 10 artificial-intelligence-generated picks (opens in new tab) could follow in the tracks of their successful predecessors.

But if you prefer a human hand at the helm, consider tapping the wisdom of the crowd. These 25 blue-chip stocks (opens in new tab) are the preferred holdings of a number of billionaires and other high-net-worth investors, including Ray Dalio, Chris Hohn and, of course, Warren Buffett. Check them out.

Kyle Woodley was long NIO, NVDA, SQ and TSLA as of this writing.

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.