By Sara Sjolin, MarketWatch , Ryan Vlastelica

The Dow's 0.2% decline is the biggest one-day drop of February

U.S. stocks fell modestly on Friday, putting the Dow on track to end its record-setting streak as investors found few catalysts to push shares deeper into record territory following 10 straight positive sessions.

The Dow Jones Industrial Average fell 50 points, or 0.2%, to 20,760. On Thursday, the blue-chip average posted its 10th straight gain, as well as its 10th straight record closing high (http://www.marketwatch.com/story/dow-eyes-10th-day-of-gains-as-us-stock-futures-rise-on-back-of-oil-rally-2017-02-23)--the longest such streak since 1987.

The S&P 500 slipped 5 points to 2,356, a drop of 0.2%. The Nasdaq Composite lost 11 points to trade at 5,824, a decline of 0.2% on the day.

The day's decline was driven by financials, which lost 1.2%, and by the energy sector, which fell 1% on the back of a crude oil selloff. Both sectors are among the biggest gainers of the market's recent advance, suggesting investors may be taking profits at current levels.

Among the top drags on the Dow, Goldman Sachs Group Inc.(GS) fell 1.5% while J.P. Morgan Chase & Co. (JPM) fell 1.3%. The third and fourth decliners were Chevron Corp(CVX) and Exxon Mobil (XOM), both of which lost 0.9% on the day.

"We're vulnerable to a short-term pullback because a lot of optimism has come into the market in the past week or two," said Bruce Bittles, chief investment strategist at Robert W. Baird & Co.

For the holiday-shortened week, both the Dow and S&P were set for gains, while the Nasdaq was eyeing a weekly loss. The Dow is currently on track for a 0.7% rise, while the S&P 500 is up 0.4% for the week. The Nasdaq is down 0.3%.

In a sign of the market's recent strength, the Dow's slender 0.2% decline represented the biggest one-day drop since Jan. 31, more than three weeks ago.

The Dow is up nearly 9% over the past three months, with the gains largely due to President Donald Trump's election in November. Investors are betting that Trump's policies on taxes and regulation will accelerate economic growth and boost corporate earnings, but concerns are growing (http://www.marketwatch.com/story/investors-may-be-banking-too-much-on-trump-lifting-earnings-2017-02-22) that current valuations may not justify the impact that could result from those policies, if enacted.

"Of course we're not comfortable with valuations, but valuations don't tell you what direction the market will be moving in," Bittles said. "But because the market climbs a wall of uncertainty, the market could be safe until taxes are cut and regulations are withdrawn. Once those happen, the market could be vulnerable."

Markets saw little impact from a speech Trump gave at the Conservative Political Action Conference, where he said that the U.S. tax code would be made fair.

Trump comments on taxes have been a driver behind recent gains, though few specifics have yet been released. For that reason, investors are also looking ahead to an address that Trump is scheduled to make to Congress on Feb. 28, where he is expected to provide details on his highly anticipated tax reform proposals.

Read: Here's how analysts say you should trade Trump's speech to Congress (http://www.marketwatch.com/story/heres-how-analysts-say-you-should-trade-trumps-speech-to-congress-2017-02-24)

Separately, Federal Reserve Chairwoman Janet Yellen and Fed Vice Chairman Stanley Fischer are slated to speak on Friday next week. Investors will scour the comments for any hints as to when the central bank will raise interest rates.

(http://projects.marketwatch.com/2017/trump-today-signup/)

Read:Mnuchin in no rush to label China a currency manipulator (http://www.marketwatch.com/story/mnuchin-in-no-rush-to-label-china-a-currency-manipulator-2017-02-23)

And see:Doubts persist about tax timing as Trump meets with CEOs (http://www.marketwatch.com/story/doubts-persist-about-tax-timing-as-trump-meets-with-ceos-2017-02-23)

Read: Why oil experts think OPEC's U.S. headache won't go away this year (http://www.marketwatch.com/story/why-oil-experts-think-opecs-us-headache-wont-go-away-this-year-2017-02-20)

(http://www.marketwatch.com/story/why-oil-experts-think-opecs-us-headache-wont-go-away-this-year-2017-02-20)Crude oil was down 0.8% at $54.07 on Friday, while Brent traded 0.7% lower at $56.40. The U.S. oil benchmark on Thursday closed at its highest level since July 2015 (http://www.marketwatch.com/story/oil-prices-regain-momentum-us-supply-data-ahead-2017-02-23), boosted by a smaller-than-expected rise in crude inventories. The drop in oil prices weighed on the energy sector, with Occidental Petroleum Corp. (OXY) down 1.1%.

In the latest economic data, consumer sentiment fell from a 13-year high in February, while new-home sales (http://www.marketwatch.com/story/new-home-sales-bounce-back-in-january-as-housing-demand-bolsters-market-2017-02-24) posted a strong rebound in January.

Stock movers: Shares of Hewlett Packard Enterprise Co.(HPE) slumped 7.4% after the IT company late Thursday reported lower sales than expected (http://www.marketwatch.com/story/hewlett-packard-enterprise-falls-after-revenue-miss-slashed-earnings-forecast-2017-02-23) and cut its earnings projections for the fiscal year.

Shares of RH(RH), the company formerly known as Restoration Hardware, jumped 28% a day after it forecast higher-than-expected quarterly results (http://www.marketwatch.com/story/rh-shares-rally-on-higher-than-expected-forecast-2017-02-23).

Nordstrom Inc.(JWN) rallied 6.3% after the department store chain late Thursday reported earnings that beat forecasts (http://www.marketwatch.com/story/nordstrom-shares-rise-after-retailer-beats-earnings-expectations-2017-02-23). The retailer has been in focus (http://www.marketwatch.com/story/nordstrom-recovers-from-trumps-terrible-tweet-in-just-4-minutes-2017-02-08) following a recent decision by the company to drop Ivanka Trump's fashion label, citing poor sales. President Trump tweeted that the company was treating his daughter "so unfairly," although the tweet didn't have a lasting negative impact on the stock.

Foot Locker Inc.(FL) gained 8.2% after the shoe retailer reported profit that beat forecasts (http://www.marketwatch.com/story/foot-locker-profit-and-sales-rise-above-expectations-2017-02-24).

J.C. Penney Co. Inc.(JCP) tumbled 4%, also after releasing results.

Other markets:Asian stock markets (http://www.marketwatch.com/story/asian-markets-dip-as-investors-cash-out-after-dovish-fed-minutes-2017-02-23) closed mostly lower, with Europe following the same trend in the early going.

Metals rose across the board, with silver on track for a ninth straight weeks of gains.

The ICE Dollar index was flat at 101.06.

 

(END) Dow Jones Newswires

February 24, 2017 14:16 ET (19:16 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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