US open: Wall Street dips on low trading volumes

US equities were lower on Monday, albeit on lighter-than-usual trading volumes, with some market commentary emphasising how traders might be in a holding pattern ahead of the start of the corporate earnings season, next week.

As of 16:24 BST the Dow Jones Industrial Average was retreating by 30.75 points to 17,761.94, the S&P 500 was slipping by 5.42 points to 2,067.44 and the Nasdaq Composite was off by 20.23 to 4,893.26.

From a sector standpoint, the worst performing industrial groups were: Coal (-4.43%), Non-ferrous metals (-4.35%), Tires (-3.03%), Home construction (-2.73%) and Oil equipment services (-2.56%).

The Chicago Board Options Exchange volatility index was bouncing back by 7.10% to 14.03 points after closing at its lowest since 26 August on the previous Friday.

Pundits appeared to be divided as to whether low analysts’ forecasts for quarterly earnings were a sign of trouble ahead or if that meant it would now be easier for companies to beat estimates on the heels of a recently weaker US dollar and more stable commodity prices.

Are markets being too pessimistic?

Acting as a backdrop, investors were also keeping tabs on the Fedspeak which was on offer at the start of the week.

A solid jobs report for March, published on 1 April, did little to dissuade markets that interest rates in the States would remain on hold for some time.

However, on Monday afternoon the president of the Federal Reserve bank of Boston, Eric Rosengren, voiced surprise at the fact that financial markets were still pricing in just one more interest rate hike in 2016.

"The US has weathered foreign shocks quite well ... and I believe it will likely be appropriate to resume the path of gradual tightening sooner than is implied by financial-market futures," as long as the recovery continues, Rosengren said.

Crude futures drop

Meanwhile, oil prices were down after Iranian oil minister Bijan Zanganeh told Iran's Mehr News agency over the weekend that the country would continue increasing its production and exports.

West Texas Intermediate crude oil futures were 0.90% lower to $36.48 per barrel.

In economic data, US factory orders dropped 1.7% month-on-month in February, in line with economists’ forecasts.

Elsewhere, Asian stocks were mixed as markets in China, Hong Kong and Taiwan were closed for a holiday.

On the corporate front, Virgin America rocketed 41.62% to $55.09 after Alaska Air Group said it would buy the airline for $57 a share in cash, compared to the stock’s closing price of $55.09 on Friday.

Stock in Tesla Motors was up by 4.02% after chief executive Elon Musk said reservations for its new, more affordable, Model 3 electric car have reached more than 276,000 since 21 March.

Meanwhile, and in FX markets, the euro was off by 0.08% against the dollar, but the Greenback was down by 0.35% against the pound and by 0.47% against the yen.