Stocks retreat from record highs
NEW YORK — After big gains over the last two days, U.S. stocks declined Tuesday with big technology companies giving up some of their recent gains.
The Standard & Poor’s 500 index fell 8.69 points, or 0.3 percent, to 2,681.47. The Dow Jones industrial average shed 37.45 points, or 0.2 percent, to 24,754.75. The Nasdaq composite gave up 30.91 points, or 0.4 percent, to 6,963.85. The Russell 2000 index of smaller-company stocks fell 12.17 points, or 0.8 percent, to 1,536.75. It climbed almost 3 percent over the previous two days.
High-dividend stocks dropped as bond yields rose. U.S. indexes had jumped to record highs over the last two days as lawmakers appeared to shore up enough support for the Republican-sponsored tax bill.
Investors like that because it would boost corporate profits and likely raise stock prices along with it. The bill would initially cut taxes for most Americans but by 2027 would increase tax bills for most.
While stocks weren’t doing much Tuesday, bond prices fell. The yield on the 10-year Treasury note rose to its highest price in more than a month, to 2.45 percent from 2.39 percent late Monday.
Invesco Global Market Strategist Kristina Hooper said two factors are sending bond yields higher: Investors are selling bonds to buy stocks as the tax bill appears likely to pass, and they also feel the bill may contribute to inflation.
“There’s this expectation that we’ll see companies save money on taxes, to put it simply, and spend more in other areas,” she said. Investors think “it’s going to have an impact on employment, wages, and therefore inflation,” she said.
Apple shares fell $1.88, or 1.1 percent, to $174.54 after closing at a new high on Monday. Visa lost $1.41, or 1.2 percent, to $112.14.
Investors also traded on corporate news. Offshore drilling platform maker McDermott International said it will acquire engineering, procurement and construction services company Chicago Bridge & Iron. The companies valued the deal at $6 billion. McDermott fell 90 cents, or 11.9 percent, to $6.69 and CB&I lost $1.91, or 10.7 percent, to $16.01.
Medical device maker Zimmer Biomet climbed after it named Bryan Hanson to be its new chief executive officer. Hanson most recently led at Medtronic’s minimally invasive therapies business. Former CEO David Dvorak left the company in July. Zimmer gained $6.95, or 6.1 percent, to $121.38.
Hospital operator Tenet Healthcare said it will cut another $100 million in costs and will look to sell its Conifer business, which provides revenue management services. Its stock gained 29 cents, or 2 percent, to $15.03.
Nursing and rehabilitation center company Kindred Healthcare said it will be bought by health insurer Humana and two private equity firms for $9 a share. That values Kindred at $782 million, and the company said the deal is worth $4.1 billion including debt.
Rumors of a sale have increased the stock 23 percent this month, including a gain of 10.5 percent Monday. On Tuesday it retreated 40 cents, or 4.2 percent, to $9.10.
Energy companies edged higher along with the price of oil. Benchmark U.S. crude rose 30 cents to $57.46 a barrel in New York while Brent crude, used to price international oils, added 39 cents to $63.80 a barrel in London.