Stocks retreat from record highs as tech sector slides
Stocks stalled Wednesday, slipping from record highs set in the previous session.
The Dow was down by 5 points, with Apple weighing on the blue chips.
The S&P 500 and Nasdaq declined about 0.1 percent as technology stocks retreated.
“The real key [for the market] will revolve around whether Technology can strengthen from here given its push up towards highs of its recent range, while Apple starts to show some evidence of peaking out in the short run,” said Mark Newton, managing member at Newton Advisors, in a note.”
“This is not a surprise. We’ve had two pretty strong days,” said Peter Cardillo, chief market economist at First Standard Financial. “That puts the S&P 500 on track to test 2,500, which would be a milestone.”
The S&P 500 posted intraday and closing record highs in the previous session, building on a 1 percent gain made on Monday. The Nasdaq and the Dow also set record closes on Tuesday.
“I could not have drawn yesterday’s path taken by the S&P 500 any more perfectly than the actual chart if I tried,” said Jeremy Klein, chief market strategist at FBN Securities, in a note Wednesday. “After soaring to another record peak on Monday, the benchmark added to its gains as quietly as possible.”
Investors started off the week by breathing a sigh of relief after damages from Hurricane Irma appeared to be less than initially expected, while North Korea held off on another nuclear test.
Wall Street also got some hope that tax reform could still happen this year. Treasury Secretary Steven Mnuchin told CNBC on Tuesday that the administration would pass tax reform before 2018.
President Donald Trump, meanwhile, urged Congress to move forward with tax reform, saying on Twitter that “the biggest Tax Cut & Tax Reform package in the history of our country will soon begin. Move fast Congress!”
Tax reform hopes have been one of the main catalysts for the stock market since Trump’s election. In that period, the S&P 500’s market value has increased by more than $2 trillion.
But tax reform expectations have decreased since the election, as the administration has been bogged down by in-party fighting and a failed attempt at overhauling health care, among other factors.
“The mood [in the market] has been positively affected by the prospects of something good coming out” of the Trump administration, said Randy Warren, chief investment officer at Warren Financial. “But at the same time, there isn’t a big premium built into the market because of all the dysfunction in Washington.”
“However, if we can get some tax reform, that would be tremendous for the market,” Warren said.
In economic news, the U.S. Producer Price Index — a measurement of inflation — rose 0.2 percent in August, below the expected 0.3 percent increase. There are other major data set for release Wednesday.