Wall Street edges back from its record heights

U.S. stocks edged back from record levels Monday as they head for the final stretch of what looks to be another winning month.

The Standard & Poor’s 500 index slipped 19.27 points, or 0.4%, to 5,069.53 after closing last week at an all-time high. The Dow Jones industrial average fell 62.30 points, or 0.2%, to 39,069.23, and the Nasdaq composite lost 20.57 points, or 0.1%, to close at 15,976.25.

Berkshire Hathaway was one of the heaviest weights on the market, even though Warren Buffett’s company reported stronger results for the end of 2023 than analysts expected. Class-B shares of the company, whose subsidiaries include Geico, Fruit of the Loom and Brooks running shoes, initially jumped more than 3% but later fell to a loss of 1.9%.

The famed investor warned shareholders not to expect any more “eye-popping performance” because there are no bargains available in the market of big enough size to make a meaningful difference. Buffett is notorious for buying companies when they’re cheap.

That follows broader criticism from some financial analysts that prices all over Wall Street have soared too high in their big run since Halloween.

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The S&P 500 is on track to close out its fourth straight winning month and is coming off its 15th winning week in the last 17. And the stock market may not have been cheap even when it bottomed out in October 2022. That marked the priciest bear-market low in history, according to some measures of stock prices against corporate earnings, said Doug Ramsey, chief investment officer of Leuthold.

This recent rally got going in October amid hopes that inflation is cooling enough for the Federal Reserve to cut interest rates several times this year. Such cuts would relax the pressure on the economy and financial system, while goosing investment prices.

Expectations are still high for rate cuts to come eventually this year, but traders have been delaying their forecasts after some stronger-than-expected reports on the economy. Those data in the meantime raise hopes that growth in profits for companies can strengthen, which helps stock prices too.

Domino’s Pizza jumped 5.8% for one of the biggest gains in the S&P 500 after it reported profit for the last three months of 2023 that topped analysts’ expectations.

Amazon’s stock slipped 0.1% in its first day as a member of the Dow Jones industrial average. It replaced Walgreens Boots Alliance, which fell 3.4%.

Home-builder stocks were mixed after a report showed sales of new homes strengthened last month by less than economists expected. Toll Bros. gained 1.1%, and Lennar fell 0.6%.

Intuitive Machines lost more than a third of its value after the company said its lunar lander may stop working Tuesday after it landed sideways near the south pole of the moon. The 34.6% drop, though, only trims what’s been a moonshot for its stock this year. It’s still up 145.4% since the end of 2023.

Last week, stocks got a big boost after another blowout report from Nvidia added more chum to the frenzy that’s already built around artificial-intelligence technology. Nvidia, whose chips help power AI technologies, rose 0.3% on Monday, and it’s already up nearly 60% this year.

Earnings reporting season for the big companies in the S&P 500 is in its tail end, but this week still offers updates from several big names. They include several that could help show how well spending by U.S. households is holding up. Such spending has been one of the main reasons the U.S. economy has blasted through expectations for a possible recession.

Best Buy, Lowe’s and TJX, the parent company of T.J. Maxx and Marshalls, will report results this week. So will several big tech-related companies, including Salesforce.com and HP.

On the economic calendar, the U.S. government on Thursday will give the latest update on the measure of inflation that the Federal Reserve prefers to use. It’s usually a less-impactful report, because data on inflation at the consumer and wholesale levels for the month have already been released.

But those reports came in hotter than economists expected, which could lead to more volatility this time around. The hope on Wall Street is that inflation will continue to cool fast enough to convince the Federal Reserve to begin cutting rates by June.

Treasury yields ticked higher in the bond market. The yield on the 10-year Treasury rose to 4.27% from 4.25% late Friday.

In stock markets abroad, indexes were mixed. Japan’s Nikkei 225 added 0.3% to set another record after recouping the last of the losses suffered in the bursting of its “bubble” economy at the end of 1989.

Stocks were lower across much of the rest of Asia and mixed in much of Europe.