US stocks retreat after Dow breaches 22,000 mark
The Dow breached the 22,000 mark briefly in early trading on Wednesday, powered by Apple’s stellar results, before stocks retreated sharply across sectors as investors locked in gains.
Apple jumped as much as 6.46% to a record high, after the world’s largest publicly listed company reported strong results and iPhone sales, and signaled its upcoming 10th-anniversary phone is on schedule. The stock is up about 30% this year.
Microsoft and Facebook were among the top drags on both the S&P and the Nasdaq.
However, the S&P 500 information technology index is up about 22% year to date, leading other sectors, as investors look for growth in an otherwise low-growth environment.
“Typically at those big round numbers the market seems to hesitate ... I’m looking at this as a situation where the underlying evidence as to why the stock market has responded well is the fertile climate for corporate profits which is likely to remain,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott.
The Dow has risen 11% in 2017, even as Wall Street is losing confidence that President Donald Trump and a Republican-controlled Congress would be able to cut taxes and increase infrastructure spending this year.
The Dow hit the 20,000 mark in late January and crossed the 21,000 mark in just over a month on 1 March.
Two-thirds of S&P 500 companies have reported their second-quarter earnings so far and 72% of them have beaten Wall Street’s expectations, according to Thomson Reuters I/B/E/S. In a typical quarter, 64% of the companies beat expectations.
At 12:35 pm ET (1635 GMT), the Dow Jones Industrial Average was up 11.56 points, or 0.05%, at 21,975.48, the S&P 500 was down 7.04 points, or 0.28%, at 2,469.31.
The Nasdaq Composite was down 34.35 points, or 0.54%, at 6,328.59.
Nine of the 11 major S&P 500 sectors were lower, with the telecommunications index’s 1.05% loss leading the decliners.
Data showed US private employers added 178,000 jobs in July, after adding 191,000 jobs in June. Economists polled by Reuters expected an addition of 185,000 jobs. The data comes ahead of the more comprehensive non-farm payrolls data on Friday.
AutoNation fell 6.19% after the largest US auto retail chain, reported a fall in quarterly profit.
Cardinal Health fell 9.34% after the drug distributor’s 2018 profit forecast missed analysts’ estimate.
Declining issues outnumbered advancers on the NYSE by 1,851 to 970. On the Nasdaq, 2,145 issues fell and 687 advanced. Reuters