MARKET SNAPSHOT: Dow's Record Run Set To Hit A Wall

02/17/17 10:04 AM EST

By Joseph Adinolfi and Barbara Kollmeyer, MarketWatch

Kraft and Unilever shares alike shoot upward amid deal talk

U.S. stocks opened lower on Friday, leaving the Dow Jones Industrial Average on track to see its spectacular record run snapped.

Market participants have attributed the stall-out to investors taking a breather after a string of healthy gains and reluctance to make bullish bets ahead of the Presidents Day holiday.

The Doweased by 68 points, or 0.3%, to 20,554 early Friday, while the S&P 500slipped 6 points, or 0.3%, to 2,340. The Nasdaq Composite Indexpulled back by 10 points, or 0.2%, to 5,805.

Optimism surrounding President Donald Trump's proposed economic policies--fueled by the notion that tax cuts and increased infrastructure spending will boost growth and corporate profits--have helped push U.S. stocks to all-time highs.

But Mohannad Aama, managing director at Beam Capital Management, expects the market to take an extended breather, her said, because "we've fully priced in the potential for policy improvements as it relates to the stock market."

In deal news, shares of Kraft Heinz Co.(KHC)and Unilever PLC(ULVR.LN)(UNA.AE) (ULVR.LN)rocketed higher after Kraft said Unilver had rejected its initial merger offer. The company indicated that talks were still ongoing (http://www.marketwatch.com/story/kraft-heinz-confirms-merger-proposal-with-unilver-was-declined-2017-02-17).

Need to Know:Tempted to cash in on the market rally? Why Tesla may be a good place to start (http://www.marketwatch.com/story/tempted-to-cash-in-on-the-market-rally-why-tesla-may-be-a-good-place-to-start-2017-02-17)

Driven by losses in the energy sector, U.S. stocks pulled back from a string of simultaneous records on Thursday (http://www.marketwatch.com/story/us-stocks-in-holding-pattern-after-best-record-run-in-25-years-2017-02-16), with only the Dow managing to eke out a fresh high--it gained less than 0.1% to close at 20,619.77. The S&P 500 index closed down 0.1% to 2,347.22, and the Nasdaq Composite also lost 0.1% to finish at 5,814.90.

The pullback came partly after a White House press conference in which Trump revealed that tax-reform proposals (http://www.marketwatch.com/story/trump-says-health-care-proposal-coming-in-march-2017-02-16) will take precedence only after a push to replace Obamacare in March.

This announcement could lead to an extended decline in stocks, said Lee Wild, head of equity strategy at Interactive Investor. "A pullback on tax reform seems to be the biggest banana skin" for investors, Wild said in a note to clients.

Opinion:Trump's tax reform looks like just another of his tweets (http://www.marketwatch.com/story/trumps-tax-promise-looks-like-just-another-of-his-tweets-2017-02-16)

Others believe the market rally could have more room to run once investors have a clearer picture of Trump's plans for tax reform and the health-care overhaul.

"I still remain optimistic on the market going forward," said Gary Anetsberger, chief executive officer at Millennium Trust Co.

For the week so far, the Dow industrials have gained 1.4%, while the Nasdaq Composite and S&P 500 have posted gains of 1.1% and 1.2%.

The Presidents Day holiday will shutter stock and bond markets on Monday (), meaning there may be little appetite to build new positions on Friday, Wild said.

Read:Investors might finally be recognizing risk in the stock market (http://www.marketwatch.com/story/investors-might-be-finally-recognizing-risk-in-the-stock-market-2017-02-16)

In the lengthy and wide-ranging news conference on Thursday, Trump spoke of inheriting a "mess" (http://www.marketwatch.com/story/a-look-at-the-economy-trump-inherited-which-he-calls-a-mess-2017-02-16) from President Barack Obama and sparred with members of the media and the mainstream media more generally.

Wild noted that the market will be eager to hear what the president has to say in an address to Congress on Feb. 28.

(http://projects.marketwatch.com/2017/trump-today-signup/)

Economic docket: It's also a light day for data. The only top-tier releases are leading indicators for January and a fourth-quarter report on advance services, both due at 10 a.m. Eastern time.

Stock movers: Shares of Deere & Co.(DE)rose 1.3% after earnings and sales beat forecasts. The maker of construction equipment offered up an upbeat outlook (http://www.marketwatch.com/story/deeres-stock-jumps-after-profit-and-sales-beat-upbeat-outlook-2017-02-17).

JM Smucker Co. shares(SJM)fell 4.6% after the jam-maker's results.

Campbell Soup Co. shares(CPB)fell 5.4% after second-quarter profit and revenue missed forecasts.

General Mills Inc. shares(GIS)fell 3.2% after the company lowered its sales outlook (http://www.marketwatch.com/story/general-mills-shares-drop-after-it-lowers-sales-outlook-2017-02-17).

Read:What to expect from Deere earnings (http://www.marketwatch.com/story/deere-earnings-what-to-expect-2017-02-16)

Shares of WebMD Health Corp.(WBMD)were halted late Thursday after the online health information group said it may put itself up for sale (http://www.marketwatch.com/story/webmd-stock-halted-company-may-sell-itself-2017-02-16). But the shares were up 2.8% in recent trade.

Other markets: Asian stocksfinished mostly lower after U.S. stocks largely stepped back from their record run. European stocksslipped (http://www.marketwatch.com/story/european-stocks-slip-trimming-their-gain-for-the-week-2017-02-17).

The dollarwas slightly lower against the yen (http://www.marketwatch.com/story/dollar-flattens-out-ahead-of-three-day-weekend-in-the-us-2017-02-17).

Oil prices (http://www.marketwatch.com/story/oil-prices-rise-moderately-on-hopes-for-more-cuts-from-opec-2017-02-17)declined, while goldrose marginally.

 

(END) Dow Jones Newswires

February 17, 2017 10:04 ET (15:04 GMT)

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