US open: Losses at the bell as higher bond yields offset Caterpillar's earnings beat
Wall Street trading began with losses as higher US Treasury bond yields offset a sizeable earnings beat from heavy equipment manufacturer Caterpillar.
As of 1540 BST, the Dow Jones was down 0.11% at 25,422.32, while the S&P 500 was 0.17% lower to 2,813.98 and the Nasdaq was trading 0.74% weaker at 7,680.20.
Connor Campbell, a financial analyst at SpreadEx, said, "The Dow Jones didn't do much as the afternoon session got underway, anxious ahead of a busy week that runs the gamut from Tuesday's Q3 results from Apple through Wednesday's Fed meeting to Friday's non-farm jobs report."
"The US index opened flat at 25,450, around 150 points shy of the five-month intraday highs struck last Friday. There wasn't really much to talk about, Monday the calm before a week that could well come to dictate the rest of the summer," added Campbell.
Shares in the US finished lower on Friday, weighed down by renewed losses in the technology space, with sentiment souring after Twitter's latest quarterly update sent the company's stock diving.
It followed a sharp drop in Facebook stock the day before after the social media giant marked down its forecasts for profit margins in 2018.
Commenting on Monday's market backdrop, Craig Erlam at Oanda said: "Stock markets have been gradually rising in recent weeks, making their way back to the record high levels they achieved earlier in the year before the numerous trade conflicts involving the US heated up."
"Earnings season has delivered a positive distraction for investors, with companies once again reporting stellar quarterly results aided by the obvious benefit of tax cuts. We'll get results from another 144 S&P 500 companies this week as US corporates look to continue the positive momentum of earnings season so far and potentially propel the index to a new high," Erlam added.
On Monday, Caterpillar dropped 0.31% despite raising its full-year earnings per share forecast and Tyson Foods fell 5.35% after revealing that Trump's recent trade spat with China had led it to cut its full-year EPS.
Elsewhere, climbing three basis points at the start of the week, US 10-year Treasury yields hit 2.97% amidst speculation that the Bank of Japan could tweak its bond-buying policy when rate-setters in Tokyo met the next day.
On the economic front, the National Association of Home Builders pending home sales index rose for the first time in three months in June.
Pending home sales, which is based on contract signings on previously owned homes, increased 0.9% month-on-month in June - something the NAHB said could be a sign that "the worst of the supply crunch affecting most of the country" may very well be over.
Analysts expected sales to rise just 0.01%.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said, "The pending sales index is not always a reliable indicator of the next month’s actual existing home sales index, but it was right in June, correctly signalling the decline to 5.38m, near the bottom of the range of the past two years."
"The trend in sales is flat, and the mortgage applications numbers point to a modest decline over the next few months, as higher mortgage rates and tighter lending standards bite into demand," he added.