In Broad Decline, Wall Street Retreats from Records
U.S. stocks edged lower on Tuesday, with major indexes pulling back from record levels as the recent rally lost steam, and the trend of modest moves and low volume continued heading into the final trading day of the year.
Despite the modest move lower, the day's losses were broad, with eight of the ten primary S&P 500 sectors in the red. Utilities <.SPLRCU> - 2014's best sector performer - led the decline with a drop of 1.7 percent. Financials <.SPSY> and materials <.SPLRCM> managed to move just above the unchanged mark.
Equities have been trending to the upside recently, buoyed by strong economic data and the U.S. Federal Reserve's commitment to be "patient" about raising interest rates. After the S&P 500 gained nearly 6 percent over the prior eight sessions, it notched its 53rd record close of the year on Monday, while the Dow just narrowly extending its streak of positive sessions to eight.
The speed and scale of the rally could push traders to take profits, and volatility could be amplified with many market participants out for the holiday, which stifles volume. The stock market will be closed on Thursday for the New Year's holiday.
"Just some last-minute profit-taking, tomorrow is the last trading session of the year," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
"We had a strong run up and the market kept going up without pausing. There comes a point a time where the market just says, 'OK, I need to rest a bit.'"
In the latest economic data, consumer confidence rose slightly less than expected in December, while U.S. single-family home price appreciation slowed less than forecast in October.
The Dow Jones industrial average <.DJI> fell 48.51 points, or 0.27 percent, to 17,989.72, the S&P 500 <.SPX> lost 7.43 points, or 0.36 percent, to 2,083.14 and the Nasdaq Composite <.IXIC> dropped 23.71 points, or 0.49 percent, to 4,783.20.
NeuroDerm Ltd <NDRM.O> soared 97.2 percent to $12.19 on heavy volume after it said data from a mid-stage study suggested that a higher dose of its Parkinson's drug could provide an alternative to treatments that require surgery.
Civeo Corp <CVEO.N>, which provides temporary housing for oilfield workers and miners, said late Monday it slashed its workforce and forecast revenue could fall by one-third as slumping crude prices force oil producers to cut costs. The stock plunged 51.3 percent to $4.03 on volume of about 42.1 million shares, the most active day in its history.
Declining issues outnumbered advancing ones on the NYSE by 1,744 to 1,286, for a 1.36-to-1 ratio; on the Nasdaq, 1,610 issues fell and 1,057 advanced for a 1.52-to-1 ratio favoring decliners.
The benchmark S&P 500 was posting 23 new 52-week highs and 6 new lows; the Nasdaq Composite was recording 86 new highs and 33 new lows.