S&P 500 Retreats From Five-Day Rally
November 07 2017 - 4:45PM
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
U.S. stocks fell Tuesday, ending a five-session win streak for
the S&P 500.
Shares of Priceline Group and TripAdvisor posted double-digit
losses, putting them among 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 declined less than 0.1%, while the Nasdaq
Composite fell 0.3%. The Dow Jones Industrial Average added 8.8
points, or less than 0.1%, to 23557.
TripAdvisor shed 23% after the online travel booking company
missed revised sales estimates as it struggled with users' shift
toward mobile. Priceline, which lost 14%, lowered its profit
outlook for the remainder of the year, overshadowing
better-than-expected sales and earnings.
Banks in the S&P 500 were trading lower, 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 about 2.2% as investors continued to assess
the chip maker's bid for Qualcomm. Shares of Qualcomm gained
2.5%.
21st Century Fox added 1.1% 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 1%. 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 being 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 16:30 ET (21:30 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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