STORY: Stocks started the week on a down note, with the Dow falling about six tenths of one percent, while the S&P 500 dropped two tenths and the Nasdaq ended basically flat.
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Investors looked for moves toward de-escalation in the Middle East while they waited for earnings reports due from major technology companies later in the week.
Melissa Brown, managing director of investment decision research at SimCorp, says the technology firms will have to post significant earnings growth to maintain their lofty trading levels.
“Every company, whether it’s Google or Tesla, obviously they have very different business models and different drivers of their business. But overall, I think to justify the high valuations that we see in a lot of those names, we would need to see good earnings growth, not just kind of your run-of-the-mill 10%, but you’d want to see higher earnings growth on top of good margins as well. So, we want the businesses to be profitable and growing.”
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Meanwhile, Yemen’s Iran-aligned Houthis said on Monday that they were imposing a naval blockade on Saudi Arabia, opening a new front in the U.S.-Iran war and widening the threat to global energy supplies and trade beyond the Gulf.
But a senior Iranian official told Reuters that mediators have passed Iran a proposal to de-escalate the war with the U.S. that would offer a 10-day ceasefire to find ways to revive an interim deal reached last month.
Stocks on the move included Paramount Skydance which lost two percent and Warner Brothers Discovery which slipped almost four percent after a judge halted their $110 billion merger temporarily as a coalition of states argued it would irreparably harm competition.
And shares of Domino’s Pizza gained two percent after the chain’s quarterly revenue edged past Wall Street estimates.
