Stocks fell Monday as a strong U.S. jobs report pared bets on aggressive near-term interest rate cuts from the Federal Reserve and bad news from market heavyweights Boeing (BA - Get Report) and Apple (AAPL - Get Report) had investors in retreat.
The Dow Jones Industrial Average, which fells as much as 177 points, ended down 116 points, or 0.43%, to 26,806, the S&P 500 was off 0.48% and the Nasdaq was down 0.78%.
The jobs report for June, released on Friday, showed the U.S. added a much-larger-than-expected 224,000 jobs to the economy last month. The report has triggered a broad re-pricing of Fed expectations, with traders now looking for a smaller rate cut in July of 25 basis points, with perhaps only one more cut after that in 2019 amid a resilient economy with a booming employment market.
"The June jobs report was solid," LPL Financial said in a research note. "Labor market conditions rebounded last month from a disappointing May, easing market worries about the impact of trade tensions on corporate hiring. While a resilient job market could buoy the United States' otherwise moderate economic prospects, it could also complicate the Fed's policy decision-making."
Apple shares led the Dow lower, falling 2.1% to $200.02 after analysts at Rosenblatt Securities downgraded the stock over concern for weakening iPhone demand and slower service revenue growth over the second half of the year.
Shares of Boeing ( BA - Get Report) shares fell 1.3% to $351.20 after the aerospace giant lost a $5.9 billion order to its European rival Airbus SE ( EADSY) amid concern for the near-term fate of its flagship 737 MAX aircraft. Airbus shares were off nearly 1% to $34.69. Shares of Deutsche Bank ( DB - Get Report) fell 6.1% to $7.54 after the financial institution said it expects to slash 18,000 jobs by 2022 and create a so-called bad bank for around ?,?74 billion in underperforming assets as part of an $8.3 billion restructuring that will see Germany's biggest lender exit its equities sales and trading business. Deutsche Bank is Real Money's Stock of the Day. Shares of Verizon ( VZ - Get Report) were off nearly 1% to $57.90 after Citi analyst Michael Rollins downgraded the telecommunications company to neutral from buy with a $62 price target.Apple is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells AAPL? Learn more now.
In the energy sector, Brent crude contracts for August delivery, the global benchmark, were down 35 cents to $63.88 a barrel. West Texas Intermediate contracts for the same month, which are more tightly linked to U.S. gas prices, were off 6 cents to $57.48 a barrel.
Also, the Federal Reserve Bank of New York's survey of consumer expectations showed consumers' one-year inflation outlook rising 0.2 percentage points to 2.7%. Three-year inflation expectations increased to 2.7% as well.