Following last week's record finish on a blowout jobs report, stocks eased lower today as investors awaited the start of earnings season later this week. By the end of the day, the Dow Jones Industrial Average (^DJI 0.63%) had given back 44 points, or 0.3%, while the S&P 500 lost 0.4% and the Nasdaq fell 0.8%. Cyclicals and small caps led the fall, indicating that investors may believe that stocks have grown a little too richly valued as the S&P has gained 14% since the start of February.
There were no major economic reports out today, but earnings season will pick up later this week as Wells Fargo reports its quarterly results on Friday and a slew of Dow companies will deliver their earnings next week. Last week's strong jobs report may have also prompted some selling as investors fear that the Federal Reserve will raise interest rates sooner than expected. The unemployment rate fell from 6.3% to 6.1%, basically reaching the Fed's goal of 6%, and Goldman Sachs said it now expects the rate increase to come in the third quarter of next year instead of Q1 2016. Analysts are expecting an increase in profits of 6.2% for the second quarter, but considering the strong economic data that's come in, earnings growth could easily top that.
Apple (AAPL 0.02%) shares finished up 2% today, hitting their highest level in nearly two years, and made small gains after hours amid reports that the company had hired an executive from Tag Heuer, pointing to an upcoming launch of the so-called iWatch. The iPhone-maker nabbed Patrick Pruniaux, the VP of sales and retail at Tag Heuer, just the latest addition to its executive team as it had earlier brought in a marketing exec from Yves Saint Laurent. Shares of Apple have risen lately on anticipation for the iWatch as well as the upcoming iPhone 6 and because of its recent acquisition of Beats Electronics. According to 9to5Mac, the watch has been tested by select professional athletes, has 10 sensors for functions such as heart rate, hydration, and blood pressure, and is expected to be released in October. With wearables seen as the next big frontier in technology, the success of the iWatch's release may determine the future of the company.
Elsewhere, Kandi Technologies (KNDI 4.08%) shares finished 6% higher after the Chinese electric-vehicle maker reported $31.8 million in new subsidies from the Chinese government for a joint venture it has a 50% stake in. The windfall is based on sales of over 3,000 EVs between June and December 2013, and over 1,000 for the first quarter of 2014, and is the first subsidy the joint venture has received. CEO Hu Xiaoming said the payments will enable the company to accelerate its EV sales and its EV-sharing program. The announcement was a bone for investors to chew on, as the stock has fallen sharply from its peak amid an ongoing SEC investigation and some accounting concerns. Kandi will continue to be a momentum stock, but its EV-sharing program could be huge if the company wins more subsidies like today's.
