Dow, S&P, Nasdaq snap last week's massive rally as traders mull Fed comments
franckreporter

U.S. stocks were unable to extend last week's remarkable rally as Wall Street's major indices ended lower on Monday. The markets were weighed down by a late session pullback as cautious investors assessed latest comments from Federal Reserve speakers. 
With a light economic calendar, traders focused on speeches from Federal Reserve Governor Christopher Waller and Vice Chair Lael Brainard while looking ahead to earnings reports from major retail companies. 
The tech-heavy Nasdaq Composite (COMP.IND) ended 1.12% lower at 11,196.22 points. The S&P 500 (SP500) earlier managed to break through a key support level of 4K points, but the benchmark index ended the session down 0.89% at 3,957.25 points. The blue-chip Dow (DJI) closed 0.63% lower at 33,536.70 points.
"Stocks faltered into the close, perhaps some profit-taking after a huge run-up last week. What's encouraging, though, is that the Dow is above its 200-day moving average and the small-cap Russell 2000 hovers near it," Seeking Alpha contributor Mike Zaccardi said. 
"Adding to some anxiety might be retail earnings this week and tomorrow's PPI report. Investors should expect smaller daily swings in the days ahead with the VIX under 24," Zaccardi added.
Of the 11 S&P sectors, ten ended in the red. Real Estate was the top loser. Health Care was the only sector that gained, rebounding from broad losses on Friday. 
Rates ended higher. The 10-year Treasury yield (US10Y) closed 5 basis points higher at 3.88% and the 2-year yield (US2Y) added 8 basis points to end at 4.41%. The bond market was closed on Friday for Veterans Day. The dollar index (DXY) was +0.5% at 106.86.
U.S. stocks ended the last week with massive gains spurred by data that showed core and headline consumer inflation were lower than expected. The S&P 500 (SP500) and the Nasdaq (COMP.IND) posted their best weekly performance since late June with gains of 5.90% and 8.10%, respectively. The Dow (DJI) posted a weekly rise of 4.15%.
"It feels to me we're in a race against time for markets and the global economy over the next 12 months. Can inflation slow quickly enough for central banks to be able to slow down their hiking cycles enough to avoid systemic accidents?" Deutsche Bank's Jim Reid said.
The moderation in U.S. consumer prices in October sparked hopes that the Federal Reserve would be able to slow down its aggressive path of rate hikes. According to the CME FedWatch tool, markets are now pricing in a 80.6% probability of a 50-basis-point hike at the central bank's policy meeting next month.
However, Fed Governor Christopher Waller had some words of caution. Speaking at a conference in Sydney on Sunday, Waller said that the market got ahead of itself on the cooler CPI data and that there was still a ways to go before the central bank could start thinking about taking its "foot off the brakes."
Earlier in the day, Fed Vice Chair Lael Brainard told Bloomberg that it will "probably be appropriate soon" for the central bank to slow the pace of its rate hikes.
It was a light day in terms of economic news, with no data scheduled for Monday.
Among active stocks, pharma companies working on Alzheimer's disease treatments including Biogen (BIIB) gained after a setback in a drug made by Roche. Toymaker Hasbro (HAS) slid after Bank of America downgraded the stock and ended as the top percentage loser on the S&P.
In earnings news, the third quarter season largely comes to an end this week. Investors will be closely looking at the scheduled reports by retail giants Walmart (WMT) and Home Depot (HD) on tap tomorrow. Shares of both companies ended lower on Monday and weighed on the Dow. The technology sector will see results from NVIDIA (NVDA) and Cisco (CSCO).