Declines by industrial and technology companies weighed on U.S. stocks Tuesday, pulling the market back from its latest record highs.
The slide erased some of the gains from a broad rally earlier in the day that had sent the Dow Jones industrial average past the 26,000-point threshold for the first time.
Energy stocks fell as crude oil prices declined. Healthcare stocks were among the gainers as investors sized up the latest company earnings and deal news after a long holiday weekend.
“We’ve come perhaps a little bit too far, too fast,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. “If you look at year-to-date performance, you have the broad popular indices up roughly 3% to almost 5% in two weeks’ trading. That’s … a pace that we think is perhaps a little aggressive, so a little bit of a pause here would perhaps be constructive.”
The Standard & Poor’s 500 index fell 9.82 points, or 0.4%, to 2,776.42. The Dow ended down 10.33 points, or 0.04%, at 25,792.86. It had been up as much as 282 points earlier. The Nasdaq declined 37.38 points, or 0.5%, to 7,223.69. The Russell 2000 index of smaller-company stocks slid 19 points, or 1.2%, to 1,572.97.
Bond prices rose. The yield on the 10-year Treasury fell to 2.54% from Friday’s 2.55%.
The Dow reached its latest milestone shortly after the market opened Tuesday as investors weighed encouraging earnings from Citigroup and UnitedHealth Group.
It took the Dow seven trading days since it first closed above 25,000 on Jan. 4 to cross the 26,000-point threshold. That’s faster than the 23 days it took the Dow to go from 24,000 to 25,000 points, which was a record 1,000-point swing.
Tuesday’s rally lost steam by early afternoon, ultimately pulling the Dow and the other major indexes into the red.
Still, the stock market is off to a stellar start in 2018. The S&P 500 index has closed lower only one other day this year. It capped last week with its seventh weekly gain in the last eight.
Investors have been encouraged by strong global growth and rising company earnings. For the next few weeks, traders will have their eye on companies reporting results for the final quarter of 2017, and they’ll be watching for details on how the tax overhaul that took effect this year will affect corporations.
Many companies are taking one-off charges for bringing home money held abroad, but traders expect them to benefit in the long run from the decision to cut the standard tax rate to 21% from 35% and are bidding up their share prices.
On Tuesday, Citigroup reported an $18.3-billion loss for the fourth quarter due to the new tax law. But excluding the one-time charges, Citigroup earned a profit. The stock edged up 0.4% to $77.11.
UnitedHealth Group rose 1.9% to $232.90 after it said earnings more than doubled in the final quarter of 2017. The nation’s largest insurer also raised its forecast well beyond expectations, largely because of help from the federal tax overhaul.
Elsewhere in the market, particularly with technology and industrial stocks, investors opted to sell.
“A big concern is the market right now is: ‘Is tax reform priced in?’” said Lindsey Bell, investment strategist at CFRA Research.
Alliance Data Systems led the tech-sector decliners, dropping 6.6% to $258.07. General Electric was among the biggest laggards in the industrials sector. The conglomerate slid 2.9% to $18.21 after saying it was taking a $6.2-billion charge related to its insurance portfolio.
Qualcomm, however, rose 4.4% to $68.25 after the San Diego chipmaker sent a letter to shareholders, campaigning against a hostile-takeover attempt by rival Broadcom.
Blackhawk Network Holdings soared 23.4% to $45.05 after the financial technology company agreed to be taken private for $3.5 billion.
Viacom tumbled 7% to $31.38 after several reports said the media company is not in talks to merge with CBS Corp. CBS rose 1% to $59.43. On Friday, Viacom jumped sharply after a report suggested that a merger might be a possibility.
Energizer Holdings jumped 14.5% to $59.11 after it said it will acquire the battery and lighting assets of Spectrum Brands.
Merck rose after the drugmaker announced positive results from a clinical trial for a lung cancer treatment. The stock led the gainers in the S&P 500, climbing 5.8% to $62.07.
The price of bitcoin slumped, deepening its slide this year, after South Korea’s top financial policymaker said that banning trading in digital currencies was an option.
Bitcoin sank 21.1% to $10,718 as of 1:48 p.m. Pacific time on Tuesday, according to the tracking site CoinDesk. Bitcoin futures on the Cboe Futures Exchange sank 19.9% to settle at $11,055. The futures enable investors to make bets on the future price of bitcoin.
The price of bitcoin soared last year after starting 2017 under $1,000, but has fallen this year amid signs of potentially increased scrutiny from governments. Many finance pros believe bitcoin is in a speculative bubble that could burst at any time.
Energy stocks declined after a drop in crude oil prices. Range Resources slid 4.6% to $16.78.
Benchmark U.S. crude fell 57 cents to $63.73 a barrel. Brent crude, used to price international oils, fell 99 cents, or 1.4%, to $69.27.
Wholesale gasoline fell 2 cents to $2.06 a gallon. Heating oil fell a penny to $1.84 a gallon. Natural gas fell 7 cents, or 2.2%, to $3.13 per 1,000 cubic feet.
Gold rose $2.20 to $1,337.10 an ounce. Silver rose 5 cents to $17.19 an ounce. Copper was little changed at $3.22 a pound.
The dollar fell to 110.30 yen from Friday’s 111.09 yen. The euro strengthened to $1.2271 from $1.2181.
In overseas markets, Germany’s DAX gained 0.4% and France’s CAC 40 added 0.1%. London’s FTSE 100 shed 0.2%. Tokyo’s Nikkei 225 added 1%, Hong Kong’s Hang Seng jumped 1.8%, and Seoul’s Kospi rose 0.7%.
2:45 p.m.: This article was updated with closing prices, context and analyst comment.
1:25 p.m.: This article was updated with the close of markets.
10:45 a.m.: This article was updated with more recent market prices.
8:55 a.m.: This article was updated with market prices and context.
This article was originally published at 6:45 a.m.