Stocks fade after Dow hits 26,000
Losses by industrial and technology companies helped pull U.S. stocks lower yesterday, pulling the market back from its latest record highs.
The slide erased some of the gains from a broad rally earlier in the day that had sent the
Dow Jones indus- trial average past the 26,000-point threshold for the first time.
Energy stocks also fell as crude oil prices declined. Health care stocks were among the gainers as investors sized up the latest company earnings and deal news following a long holiday weekend.
“We’ve come perhaps a little bit too far, too fast,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. “If you look at year-to-date performance, you have the broad popular indices up roughly 3 to almost 5 percent in two weeks’ trading. That’s a fairly torrid pace and a pace that we think is perhaps a little aggressive, so a little bit of a pause here would perhaps be constructive.”
The Standard & Poor’s 500 index fell 9.82 points, or 0.4 percent, to close at 2,776.42. The Dow lost 10.33 points (0.04 percent), to 25,792.86. It had been up as much as 282 points earlier. The Nasdaq shed 37.38 points (0.5 percent), to 7,223.69. The Russell 2000 index of smaller-company stocks gave up 19 points (1.2 percent), to 1,572.97.
The Dow’s latest milestone-setting move happened shortly after the market opened yesterday as investors weighed encouraging earnings from Citigroup and UnitedHealth Group. But the milestone moment didn’t last. The rally lost steam by early afternoon, ultimately pulling the Dow and the other major indexes into the red.
Even with yesterday’s reversal, the stock market is off to a stellar start in 2018. The S&P 500 index has closed lower only one other day this year. It capped last week with its seventh weekly gain in the past eight.
Investors have been encouraged by strong global growth and rising company earnings. For the next few weeks, traders will have their eyes on companies reporting results for the final quarter of 2017 for details on how the tax overhaul that took effect earlier this year will affect corporations.
Yesterday, Citigroup reported an $18.3 billion loss for the fourth quarter due to the new tax law. But excluding the one-time charges, Citigroup earned a profit.
UnitedHealth Group gained 1.9 percent after it said earnings more than doubled in the final quarter of 2017. The nation’s largest insurer also raised its forecast well beyond expectations, largely due to help from the federal tax overhaul.