After recovering from an initial jolt, stocks, bonds, and the value of the US dollar drifted through a quiet Monday following the latest reminder that the US government may be hurtling toward an unsustainable mountain of debt.
- The S&P 500 rose 5.22 points, or 0.1%, to 5,963.60.
- The Dow Jones Industrial Average rose 137.33 points, or 0.3%, to 42,792.07.
- The Nasdaq composite rose 4.36 points, or less than 0.1%, to 19,215.46.
On Friday, Moody's Ratings became the
last of the three major credit-rating agencies to say the US federal government no longer deserves a top-tier "Aaa" rating. Stocks and US government bond prices at first fell sharply early in Monday's trading, but they trimmed their losses as the day progressed, the
AP reports.
Walmart's stock slipped 0.1% Monday, two days after President Trump demanded that it and China "eat the tariffs." Other big retailers on the schedule to report their latest quarterly results this upcoming week include Target, Home Depot, Lowe's and TJX Cos. On the winning end of Wall Street was Novavax, which rose 15% after it said US regulators approved its COVID-19 vaccine under some conditions. The approval triggered a $175 million milestone payment under the company's collaboration agreement with Sanofi.
Moody's pointed to how the US government continues to borrow more and more money to pay for its expenses, with political bickering making it difficult to either rein in Washington's spending or raise its revenue in order to get its ballooning debt under more control. They're serious problems, but nothing Moody's said is new, and critics have been railing against Washington's inability to control its debt for many years. Standard & Poor's lowered its credit rating for the US government in 2011. Because the issues are so well known already, investors have likely already accounted for them, according to Brian Rehling, head of global fixed income strategy and other analysts at Wells Fargo Investment Institute.
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