S&P 500 Retreats After Five-Day Rally
November 07 2017 - 5:29PM
Dow Jones News
By Michael Wursthorn and David Hodari
-- S&P 500, Nasdaq Composite fall after rallying on Monday
-- Financial and consumer-discretionary sectors lead declines
The S&P 500 drifted lower Tuesday, snapping the index's
five-session win streak.
Shares of Priceline Group and TripAdvisor posted double-digit
losses, making them the S&P 500's biggest percentage decliners
after the online travel companies disappointed investors with their
quarterly results. Meanwhile, falling bond yields pressured bank
stocks, and proposed deals swung shares of chip makers and media
companies.
"Put together a lot of speculative M&A transactions and
earnings and you get a good cocktail to move markets," said Michael
Scanlon, a portfolio manager at Manulife Asset Management.
The S&P 500 slipped 0.49 points, or less than 0.1%, to
2590.64. The index has now gone 45 consecutive trading days without
a decline of 0.5% or greater, the longest such streak since
1968.
The Nasdaq Composite fell 18.65 points, or 0.3%, to 6767.78
Tuesday, while the Dow Jones Industrial Average eked out a slight
gain to close at a fresh record. The blue-chip index rose 8.81
points, or less than 0.1%, to 23557.23, its sixth straight session
of gains.
TripAdvisor shed $9.18, or 23%, to $30.35 after the online
travel booking company missed revised sales estimates as it
struggled with users' shift toward mobile. Priceline -- which lost
257.28, or 14%, to 1,645.72 -- lowered its profit outlook for the
remainder of the year, overshadowing better-than-expected sales and
earnings.
Banks in the S&P 500 slumped, dragging down the financials
sector of the broad index by 1.3%.
U.S. government bonds continued to strengthen, sending the yield
on the 10-year Treasury note down to 2.309% from 2.318% Monday.
Yields fall as bond prices rise.
Declining bond yields don't bode well for banks, which earn
money on the difference between what they pay on deposits and what
they charge to lend money.
Broadcom shares fell 6.20, or 2.2%, to 271.32 as investors
continued to assess the chip maker's bid for Qualcomm. Shares of
Qualcomm gained 1.58, or 2.5%, to 64.10.
21st Century Fox added 30 cents, or 1.1%, to 27.75 after reports
that Walt Disney had held talks to purchase a large chunk of the
company's entertainment business, though those talks have since
cooled. Shares of Disney added 97 cents, or 1%, to 101.61. In 2013,
News Corp, owner of The Wall Street Journal and other publishing
businesses, and 21st Century Fox, home to the major entertainment
assets, were split into their own businesses.
Robust corporate earnings have helped push stocks to fresh highs
in recent weeks. More than 80% of the companies in the S&P 500
have reported for the third quarter so far, according to FactSet.
Many have reported upbeat results, especially among the energy
sector, which is rebounding from a slump in commodities prices in
2016.
However, sectors such as financials have posted earnings
declines from the year before, with insurance companies the biggest
drag due to severe summer storms, says FactSet's data.
"What is slightly concerning to me is that much of earnings
upside has come from energy and materials, and I don't know that
environment will be sustained," said Marc Zabicki, president and
chief investment officer at Bower Hill Capital Management.
The Stoxx Europe 600 shed 0.5%, while Japan's Nikkei Stock
Average rose 1.7% to levels last seen in early 1992.
Write to Michael Wursthorn at Michael.Wursthorn@wsj.com and
David Hodari at David.Hodari@dowjones.com
(END) Dow Jones Newswires
November 07, 2017 17:14 ET (22:14 GMT)
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