Stocks Close Lower at End of Choppy Trading Day

Stocks have had a turbulent start to the year, amplified in recent days by extreme moves in big tech stocks. Last week saw a record-breaking decline in Meta Platforms shares and the biggest rise since 2015 for Amazon.com shares, after the companies posted quarterly results. Friday’s better-than-expected jobs report also turned traders’ attention back to central-bank policy, which is set to tighten as the economy continues to recover.   

On Monday, the S&P 500 and Nasdaq wavered through the day before turning negative in the afternoon, dragged lower by some of those heavyweights and other tech companies.

Meta lost $12.18, or 5.1%, to $224.91. Netflix shares lost $8.07, or 2%, to $402.10. Amazon continued to rise, adding $5.92, or 0.2%, to $3158.71. The moves continue a recent divergence in so-called FAANG stocks that have led investors to shift how they trade the hot tech group.

Some investors said they weren’t deterred by the latest volatility in tech. The group rose at some points during the day, though the gains later lost steam.

“We’ve been taking advantage of some volatility,” said Mike Bailey, director of research at FBB Capital Partners. “We’ve been adding to some of the tech names during the past few weeks.”

The trading in recent weeks has been marked by big intraday reversals. Some analysts said the latest earnings season has helped draw investors back into the market in recent sessions. Last week, the S&P 500 capped off its best week since December after several twists and turns.

“We think the earnings season has been pretty constructive,” said Greg Boutle, head of U.S. equity and derivative strategy at BNP Paribas.

Companies scheduled to post results this week include Pfizer and KKR on Tuesday and Uber Technologies and Walt Disney on Wednesday.

Despite the recent rebound, it’s been hard to impress investors this earnings season. Companies that are beating estimates are performing worse than they had historically, while those that are missing estimates are being punished, JPMorgan Chase & Co. strategists wrote in a note to clients Monday. This is one of several signs that investors have grown overly bearish in recent weeks, according to JPMorgan’s Marko Kolanovic.

“As overly bearish sentiment clears, we expect the market to lift,” Mr. Kolanovic said.

In corporate news, Peloton shares soared 21% after The Wall Street Journal reported that the stationary-bike company was drawing interest from Amazon and other potential suitors. Spirit Airlines added 17% after it said it was merging with Frontier Group.

Tyson Foods climbed 12% after it said it expected its sales for the year to be at the upper end of its guidance. Hasbro slipped around 1% after reporting revenue and profit that beat Wall Street’s estimates.

In the bond market, the yield on the 10-year Treasury note settled at 1.915%, down from 1.930% Friday. The 10-year Treasury yield has been hovering near its highest levels of the year as investors have bet on a series of interest rate increases in coming months.

“Markets have been repricing, as seen in the move up in yields, but I think we’re arriving at a point where it’s difficult to price in a much more hawkish outlook than we have today. We could now see a bit of stabilization,” said Esty Dwek, chief investment officer at FlowBank.

Overseas, the pan-continental Stoxx Europe 600 added 0.7%.

In Asia, major benchmarks were mixed. The Shanghai Composite Index climbed 2%, reopening after China’s New Year holiday week, despite a private gauge of China’s services sector slipping to a five-month low. The gain was its best one-day rise since May.

Hong Kong’s Hang Seng Index closed roughly flat and Japan’s Nikkei 225 declined 0.7%. 

-Dave Sebastian contributed to this article.

Write to Anna Hirtenstein at [email protected] and Gunjan Banerji at [email protected]