U.S. stocks fell moderately on Monday, giving up an early gain, but still ended April higher. It was the first monthly increase for the market since January as company earnings have come in better than many expected.
Indexes jumped in the early going following news of several buyout deals and more strong earnings reports, but sagged after lunchtime, weighed down by losses for telecom stocks and other areas of the market.
The Dow Jones industrial average lost 148.04 points, or 0.6 percent, to 24,163.15. The Standard & Poor’s 500 index fell 21.86 points, or 0.8 percent, to 2,648.05 and the Nasdaq composite lost 53.53 points, or 0.8 percent, to 7,066.27.
Dow member McDonald’s jumped 5.8 percent to $167.83 after it reported healthier profit and revenue than analysts expected for the first three months of the year. Sales at its restaurants open more than a year were much stronger than Wall Street had forecast
McDonald’s joined the wave of companies to report big earnings growth for the first quarter, which has been better than analysts expected. Just over half the companies in the S&P 500 have reported their earnings for the first three months of the year, and they’re on pace to deliver overall growth of 23 percent, according to FactSet. That would be the strongest showing since the summer of 2010.
“It’s been phenomenal,” said Phil Orlando, chief equity market strategist at Federated Investors. “Corporate earnings are doing better. Economic growth is doing better, and I think the market is begrudgingly allowing those numbers to work their way into share prices.”
The S&P 500 has been whipping higher and lower in recent months, hurt by worries about higher interest rates and the possibility of a trade war. But the index is ending April up a modest 0.3 percent, compared to the 2.7 percent loss it had in March and 3.9 percent loss it had in February.
At the center of the buyout news was Sprint and T-Mobile. The pair announced a $26.5 billion deal to merge following years of consideration for a combination. Investors are unsure whether this attempt will get the necessary approvals from U.S. regulators.
Sprint dropped 13.7 percent to $5.61, and T-Mobile lost 6.2 percent to $60.51. Other telecom stocks also fell, with Verizon giving up 4.3 percent to $49.35 and AT&T falling 1 percent to $32.70.
Oil company Andeavor was the biggest gainer in the S&P 500 after Marathon Petroleum said it will buy the refiner and pipeline owner for more than $23 billion. Andeavor, which used to be called Tesoro, soared 13 percent to $138.32.
And DCT Industrial Trust, a logistics real-estate company, gained 11.6 percent to $65.57 after Prologis, an owner of distribution centers and other logistics real estate, agreed on Sunday to buy it in an all-stock deal.
Besides being the heart of earnings reporting season for companies, this week will also feature a policy meeting for the Federal Reserve on interest rates. The Fed will announce its decision on Wednesday.
On Friday, the government releases its jobs report, which is usually the most anticipated economic report of each month.
Benchmark U.S. crude rose 47 cents to $68.57 per barrel. Brent crude, the international standard, gained 53 cents to $75.17. The yield on the 10-year Treasury note dipped to 2.94 percent from 2.96 percent late Friday.
The dollar rose to 109.29 Japanese yen from 109.02 yen late Friday. The euro fell to $1.2082 from $1.2121, and the British pound dipped to $1.3748 from $1.3785.
Gold fell $4.20 to $1,319.20 an ounce, silver fell 10 cents to $16.40 an ounce and copper rose less than 1 cent to $3.074 a pound.
