By Yasin Ebrahim
Investing.com — The Dow eked out a gain Monday as gains in energy offset a slump in consumer discretionary stocks just as concerns about a slowing economy heat up.
The Dow Jones Industrial Average gained 0.08%, or 27 points, the S&P 500 fell 0.34%, the the Nasdaq fell 1.20%.
Energy jumped more than 2% after oil clawed back earlier losses on fears of a supply shortage as European members appear to be making progress on an agreement to ban Russian oil.
APA (NASDAQ:APA), Marathon Oil (NYSE:MRO), and Occidental Petroleum Corporation (NYSE:OXY) were among the biggest gainers, with the latter up more than 5%.
Financials, meanwhile, were also a drag on the broader market led by Signature Bank (NASDAQ:SBNY), as the cryptocurrency-exposed bank reported a fall in deposits following a rout in crypto markets.
Regional banks, meanwhile, were also nursing losses, adding to pressure on the sector amid growing bets of an economic slowdown following weaker economic growth reported in China overnight.
“Our conviction is that the chances of an outright recession in 2022 remain low,” Wells Fargo said in a note. “However, the probability has risen substantially that the economy could suffer a 2023 contraction.”
Consumer discretionary stocks were the biggest drag on the market, paced by a more than 5% fall in Tesla (NASDAQ:TSLA) after the U.S. electric automaker recalled 107,293 locally made Model 3 and Model Y vehicles in China, to fix software problems, according to the State Administration for Market Regulation.
Big tech traded mixed, with Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL) and Amazon (NASDAQ:AMZN) in the red, while Facebook (NASDAQ:FB) and Microsoft (NASDAQ:MSFT) ended the session in the green.
Twitter (NYSE:TWTR), meanwhile, shed more than 8% after Elon Musk hinted that he may lower his $54.20 a share take-private offer for the social media company.
This follows comments last week that the deal to buy Twitter was on hold, with Musk citing concerns about fake accounts on the social media platform. The move was widely viewed as a gambit to negotiate a lower price, which if not accepted and results in Musk walking away, “then the stock would likely see a sub $30 level with a broken deal in this shaky market backdrop,” Wedbush said.
On the economic front, regional manufacturing data flagged added to worries about an economic slowdown after a reading of manufacturing activity in New York fell 36.2 points to negative 11.6 in May.
In other news, JetBlue Airways (NASDAQ:JBLU) fell 4% after tabling a $30 per share offer for Spirit Airlines (NYSE:SAVE) after its previous offer for the company was rejected.
McDonald’s (NYSE:MCD), meanwhile, fell less than 1% after announcing that it will sell its restaurants in Russia, leading to a $1.4 billion writeoff.
A slew of retailers including Walmart Inc (NYSE:WMT), Home Depot Inc (NYSE:HD), Lowe’s Companies (NYSE:LOW), Target Corporation (NYSE:TGT) and others are set to report quarterly results this week that could offer much-needed clues on the strength of the consumer.