S&P 500 sees 1st decline after 7 straight gains; oil falls

Stocks are closing mostly lower today, with the S&P 500 posting its first decline after seven consecutive gains.

The benchmark index slipped 0.2% and the Dow Jones Industrial Average fell 0.6%. Bond prices rose, sending the yield on the 10-year Treasury to its lowest level since February. Oil prices pulled back after jumping overnight when talks among members of the OPEC cartel and allied oil-producing countries broke off amid a standoff with the United Arab Emirates over production levels.

The decline in bond yields weighed on banks, which led the slide in the S&P 500. Tech stocks rose, helping the Nasdaq to a modest gain.

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Stocks fell in afternoon trading today, placing the S&P 500 on pace for its first decline after notching a string of record high closes.

Oil prices retreated after jumping overnight and bond prices rose, sending the yield on the 10-year Treasury to its lowest level since February.

The S&P 500 index was down 0.4% as of 2:29 p.m. Eastern. The Dow Jones Industrial Average fell 260 points, or 0.8%, to 34,526 and the Nasdaq Composite was down less than 0.1%.

The Russell 2000 index of smaller stocks has some of the biggest losses, sliding 1.7%.

“We had a really strong move coming into this week,” said Mark Hackett, chief of investment research at Nationwide. “It’s almost natural to have a pullback when you have that kind of move.”

As of Friday, the S&P 500 had closed at a record high for seven consecutive days. The index gained 2.6% during that period and was up nearly 16% for the year.

The broad slide today is being led by banks and industrial companies. Real estate companies and several big technology stocks are among the few gainers.

Oil prices pulled back after jumping overnight when talks among members of the OPEC cartel and allied oil-producing countries broke off in the midst of a standoff with the United Arab Emirates over production levels. The U.S. benchmark crude oil price fell 2.4% to $73.31; it earlier rose to $76.98, the highest level since November 2014.

Falling oil prices dragged down energy companies. Exxon Mobil fell 2.8% and Chevron fell 2.1%.

Investors got another small snapshot of the economy, with a report showing growth in the services sector, where most Americans work, slowed in June following record expansion in May.

Longer-term Treasury yields sank as the report suggested this year’s surge in inflation may have already peaked and as nervousness rose in the market.

The 10-year Treasury yield dropped to 1.38% from 1.44% on Friday and is back to where it was in February. It had rallied powerfully earlier this year on worries that inflation was set to burst to dangerous levels as the economy roared back to life.

The report indicated prices that U.S. services businesses are paying rose at a slower rate last month. Exam gloves and masks got cheaper, for example, and the price index for the U.S. services industry decelerated to 79.5 in June after hitting a peak of 80.6 in May, according to the Institute for Supply Management. Any reading above 50 indicates growth.

More broadly, the services industry’s growth slowed last month, and by more than economists expected. That fits into Wall Street’s growing belief that growth for many areas of the economy is peaking or has done so already. It would also give more credence to the Federal Reserve’s insistence that inflation looks to be only a temporary problem.

The lower yields weighed on banks, which rely on higher yields to charge more lucrative interest on loans. Bank of America fell 2.6% and Citigroup fell 3.1%.

The market is currently in a summer lull, with investors having little go act on until next week, when corporate earnings season starts up again. U.S. markets have a holiday shortened week this week, since markets were closed on Monday.

“When you have a void of information, emotion tends to drive decision making and you’re certainly seeing that in the equity market,” Hackett said.

Shares of ride-hailing company Didi Global dropped 20.6%. That follows a 5% drop Friday after China announced it would investigate the cybersecurity practices of three ride technology companies, including Didi. The government has also announced cybersecurity reviews of Full Truck Alliance, the operator of two truck logistics platforms and Kanzhun Ltd., operator of an online recruitment outfit. Full Truck dropped 14.9% and Kanzhun fell 15.1%.

Amazon jumped 4.7% after the Pentagon said it is canceling a cloud-computing contract with Microsoft that could eventually have been worth $10 billion and will instead pursue a deal with both Microsoft and Amazon. Microsoft shares fell 0.4%.