NEW YORK (AP) — U.S. stock indexes edged lower on Monday, pulled down by sinking bank stocks, and the S&P 500 fell for just the third time in the last three weeks.
Goldman Sachs recorded one of the largest losses in the S&P 500 after describing a “muted start to the year,” even though its earnings for the first quarter still beat analysts’ expectations. Citigroup also slipped following its earnings report, as banks lead off a quarterly reporting season that analysts expect to be the weakest in nearly three years.
The S&P 500 lost 1.83 points, or 0.1%, to 2,905.58. The Dow Jones Industrial Average fell 27.53, or 0.1%, to 26,384.77, and the Nasdaq composite lost 8.15, or 0.1%, to 7,976.01. The Russell 2000 index of small-cap stocks dropped 5.63, or 0.4%, to 1,579.17.
The S&P 500 nevertheless remains within 0.9% of its record following its torrid start to the year, after the Federal Reserve said it may not raise interest rates at all in 2019.
“I think we’re going to see equities continue to confound their critics and advance,” said Margie Patel, senior portfolio manager at Wells Fargo Asset Management.
She expects growth for both the economy and corporate earnings to reaccelerate later this year, in large part because of the Federal Reserve’s pledge to hit pause on interest rate hikes. That follows seven increases in the last two years, including the last one in December, that raised worries about a possible recession and helped send the S&P 500 to a nearly 20% loss at one point.
“If you look through history, recessions have been precipitated by the Federal Reserve tightening and causing recessions — telling banks, ‘Don’t make loans’ and pulling out liquidity,” she said. “This time, they got right up to the brink, and