Tech­nol­ogy com­pa­nies lead slight pull­back in stocks

The wide sell-off sparks the big­gest loss in four months.

Austin American-Statesman - - MONEY & MARKETS - By Alex Veiga

A broad sell-off handed the U.S. stock mar­ket its big­gest loss in more than four months Mon­day, pulling the ma­jor in­dexes be­low their re­cent record highs.

Tech­nol­ogy stocks, the big­gest gain­ers in 2017, ac­counted for much of the slide. En­ergy com­pa­nies also fell as crude oil prices fin­ished lower. Util­i­ties and other rate-sen­si­tive sec­tors de­clined as bond yields hit their high­est level in al­most four years.

In­vestors weighed the lat­est com­pany earnings and deal news, in­clud­ing Keurig’s ac­qui­si­tion of Dr Pep­per Snap­ple, and looked ahead to a busy week of cor­po­rate news and eco­nomic data.

The pull­back fol­lowed a big rally Fri­day, which gave the stock mar­ket its big­gest sin­gle-day gain since March 2017.

“It may just be we’ve had a re­ally good run and peo­ple are tak­ing profit off the ta­ble right now,” said Randy Fred­er­ick, vice pres­i­dent of trad­ing and de­riv­a­tives at Charles Sch­wab.

The Stan­dard & Poor’s 500 in­dex fell 19.34 points, or 0.7 per­cent, to 2,853.53. The Dow Jones in­dus­trial av­er­age slid 177.23 points, or 0.7 per­cent, to 26,439.48. The Nas­daq com­pos­ite lost 39.27 points, or 0.5 per­cent, to 7,466.50. The Rus­sell 2000 in­dex of smaller-com­pany stocks gave up 9.95 points, or 0.6 per­cent, to 1,598.11.

Fall­ing stocks out­num­bered ris­ing ones al­most 5-1 on the New York Stock Ex­change.

Bond prices fell. The yield on the 10-year Trea­sury note rose to 2.70 per­cent, the high­est level in al­most four years, from 2.66 per­cent late Fri­day.

The prospect for stronger eco­nomic growth, both in the U.S. and abroad, has helped drive bond yields higher. As bond yields rise, it puts pres­sure on yield-sen­si­tive sec­tors: real es­tate in­vest­ment trusts, tele­coms and util­i­ties. The three sec­tors fin­ished more than 1 per­cent lower Mon­day and are in the red for the year.

In­vestors face a busy week of po­ten­tial mar­ket-mov­ing cor­po­rate news and eco­nomic data. Sev­eral big-name com­pa­nies are due to re­port quar­terly re­sults Wed­nes­day and Thurs­day, in­clud­ing Ap­ple, Ama­zon, Mi­crosoft, Face­book and Google’s par­ent com­pany Al­pha­bet.

“Com­bined, that’s 14.3 per­cent of the en­tire S&P 500 in­dex in five com­pa­nies — $3.6 tril­lion in mar­ket cap — so this is a very im­por­tant week,” said Mike Baele, se­nior port­fo­lio man­ager at U.S. Bank Pri­vate Wealth Man­age­ment.

About a quar­ter of the com­pa­nies in the S&P 500 have re­ported re­sults so far this earnings sea­son. About 65 per­cent of those de­liv­ered re­sults that ex­ceeded fi­nan­cial an­a­lysts’ ex­pec­ta­tions, ac­cord­ing to S&P Global Mar­ket In­tel­li­gence.

On Mon­day, Lock­heed Martin added 1.9 per­cent af­ter the de­fense con­trac­tor re­ported bet­ter-than-ex­pected quar­terly re­sults. The stock rose $6.52 to $351.42.

Ap­ple fell 2.1 per­cent amid grow­ing in­vestor wor­ries that the iPhone X has not been a hit with cus­tomers. Shares in the tech­nol­ogy gi­ant have been de­clin­ing for sev­eral days, eras­ing bil­lions of the com­pany’s mar­ket cap­i­tal­iza­tion. The stock shed $3.55 to $167.96. Ap­ple is sched­uled to re­port its earnings Thurs­day.

Be­yond earnings, the mar­ket will be siz­ing up new data on U.S. jobs, man­u­fac­tur­ing and con­sumer sen­ti­ment this week.

RICHARD DREW / AS­SO­CI­ATED PRESS

Trader John Panin works on the floor of the New York Stock Ex­change on Mon­day. The ma­jor U.S. stock in­dexes were down slightly Mon­day, as losses in tech­nol­ogy and en­ergy com­pa­nies out­weighed gains else­where.

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