US stocks closed with mixed fortunes on Monday 9 May, with the S&P 500 and Nasdaq Composite managing to ride higher during a healthcare stocks rally. Meanwhile, the Dow Jones Industrial Average slumped as oil prices weighed heavily.
The S&P 500 jumped 1.55 points, or 0.08%, to settle at 2,058.69. A 1.1% gain in the healthcare sector, which has been the third-worst sector on the index year-to-date, led five sectors higher, contributing the most to gains. According to CNBC, the materials sector was the greatest loser.
The Nasdaq Composite rose 14.05 points, or 0.3%, to close at 4,750.21. The iShares Nasdaq Biotechnology ETF (IBB) contributed to gains after rallying 2.6%, while Mallinckrodt (up 6.12%) and Allergan (up 6.10%) lead healthcare advancers.
The Dow Jones dropped 34.72 points, or 0.2%, to finish at 17,705.91. Declines were led by Caterpillar Inc, which fell 3.5%, as well as Chevron Corp and United Technologies Corp.
"Overall the market is a little on edge," Robert Pavlik, chief market strategist at Boston Private Wealth LLC, told MarketWatch. "There's more talk [over] if the market that has been in a rally mode since February is running out of steam. There's also talk if the energy rally is over."
The market suffered some uncertainties after Saudi Arabia's energy minister, Ali al-Naimi, was dismissed over the weekend. Al-Naimi is being replaced by Khalid al-Falih, the chairman of Saudi Arabia's state oil company, Saudi Aramco. According to MarketWatch, crude oil futures jumped overnight, but took a downward turn mid-morning as the likelihood of a production freeze from the Organisation of the Petroleum Exporting Countries disappeared.
US crude oil futures dropped $1.22, or 2.73%, at $43.44 a barrel. Diane Jaffee, senior portfolio manager at TCW, said that the uncertainty in the oil market will likely discourage investors from participating in the market at the moment. "Oil is still very important signal for the market, so investors will be sidelined until there is more clarity," she said.
The US dollar index jumped nearly 0.3%, hitting its highest since 28 April and posting its first five-day win streak since 24 March. The euro was near $1.138 and the yen at 108.39 yen against the greenback, CNBC reported. Meanwhile, treasury yields traded lower, with the 2-year yield by 0.71% and the 10-year yield holding near 1.75%.
Gold futures for June delivery closed down $27.40 at $1,266.60 an ounce for its worst performance since 16 February.
Further afield, European stocks closed higher and Asian stocks closed with mixed results. The Hang Seng and Nikkei 225 ended slightly higher, but the Shanghai Composite fell about 2.8%.
According to CNBC, Chicago Fed President Charles Evans said that the Fed's "wait-and-see" approach to monetary policy was appropriate but that solid US economic fundamentals should support a hike this year to about 2.5%. Minneapolis Fed President Neel Kashkari echoed the sentiments, saying low rates help bring workers back to the labour force without weighing too much on inflation.