Calm before the storm as stocks hold steady
Stocks held steady in a calm day of trading Monday, but the storm may be coming.
This upcoming week is full of events that could swing markets: The Federal Reserve may raise interest rates, more countries around the world may move to shake up the economic status quo and several high-profile updates on the US economy are due.
That's all in the near future, though. Monday's calendar was decidedly light, and the Standard & Poor's 500 index flipped between modest gains and losses before closing at 2,373.47, up just 0.87 points, just 0.04%. It remains within 1% of its record, which was set earlier this month.
The Dow Jones industrial average fell 21.50 points, or 0.1%, to 20,881.48. The Nasdaq rose 14.06 points, or 0.2%, to 5,875.78. Three stocks rose for every two that fell on the New York Stock Exchange.
In such a hectic week, one event still stands out from the rest: the Federal Reserve's meeting on interest rates, which begins Tuesday and ends Wednesday. Most investors expect the Fed to raise rates for only the third time since they went to nearly zero during the financial crisis in 2008.
Usually, rising interest rates are bad news for stocks because they make borrowing more expensive and can be a drag on economic growth. But many analysts say this time may be different. As long as the pace is gradual, these increases will only be getting rates back to normal rather than slamming the brakes on the economy.
It was only a few weeks ago that many investors were expecting the Fed to stand pat at its March meeting and then raise rates later in the spring. But expectations have swung following a series of strong reports on the economy. The headliner was Friday's jobs report, which showed healthy levels of hiring.
Investors will likely focus more on what Fed Chair Janet Yellen has to say after the announcement than on the rate increase itself, which is expected to be only a quarter of a percentage point.
The yield on the 10-year Treasury note rose to 2.61% from 2.58% late Friday and is approaching its highest level since 2014. The two-year yield rose to 1.37% from 1.35%, while the 30-year yield climbed to 3.21% from 3.16%.
In Europe, France's CAC 40 rose 0.1%, Britain's FTSE 100 rose 0.3% and Germany's DAX rose 0.2%. In Asia, Japan's Nikkei 225 stock index rose 0.1%, South Korea's Kospi rose 1% and the Hang Seng in Hong Kong jumped 1.1%.
Urban Outfitters had the biggest loss in the S&P 500 after dropping 96 cents, or 3.8%, to 24.21 dollars. S&P Dow Jones Indices said on Friday that it will remove the retailer from the S&P 500 index of large stocks and put it in the S&P 400 index of mid-cap stocks instead.
Mobileye, an Israeli autonomous-driving company, surged after it agreed to sell itself to Intel for 63.54 dollars per share in cash. Its U.S.-listed shares rose 13.35 dollars, or 28.2%, to 60.62 dollars. Intel slipped 75 cents, or 2.1%, to 35.16 dollars.
The dollar largely held steady against its rivals. It dipped to 114.77 Japanese yen from 114.78 yen late Friday. The euro fell to 1.0660 dollars from 1.0692 dollars, and the British pound rose to 1.2231 dollars from 1.2177 dollars.