MARKET SNAPSHOT: U.S. Stocks Close Lower Amid Broad-based Weakness
By Victor Reklaitis and Anora M. Gaudiano, MarketWatch
Home builders sell off after poor Toll Brothers earnings
U.S. stock-market indexes closed lower Tuesday, driven by losses in utilities, telecoms and industrials sectors.
An earlier rebound in the technology sector fizzled out, sending the Nasdaq Composite into negative territory, reversing solid gains in the morning.
Analysts said a pause or even a pullback after stellar fund flows into large technology shares is not surprising.
See also: Here's how violent the stock-market rotation out of tech has been (http://www.marketwatch.com/story/heres-how-violent-the-stock-market-rotation-out-of-tech-has-been-2017-12-05)
What are the main benchmarks doing?
The S&P 500 index fell 9.87 points, or 0.4%, to 2,629.57, closing with losses for a third straight session. Weakness in the market was broad-based with all but the technology sector ending with losses. Utilities and telecoms led the losses, down 1.8% and 1.2%, respectively.
The Nasdaq Composite , which was up about 0.6% in early trade, ended 0.2% lower, or 13.15 points, lower at 6,762.21.
The Dow Jones Industrial Average also reversed earlier gains, ending 109.41 points, or 0.5%, lower at 24,180.64. Among the blue-chip companies, 21 ended with losses, with Walt Disney Co. (DIS) hit the worst, down 2.7%.
Until last week, U.S. stocks had been rallying to fresh records thanks in part to progress on a U.S. tax overhaul (http://www.marketwatch.com/story/senate-passes-tax-bill-advancing-top-republican-priority-2017-12-02) in Washington.
And see:Portfolio managers are losing their enthusiasm for high-flying tech stocks (http://www.marketwatch.com/story/portfolio-managers-are-losing-their-enthusiasm-for-highflying-tech-stocks-2017-12-01)
What are strategists saying?
"The Nasdaq Composite Index was getting a little frothy, so it's not surprising to see that some details in the proposed tax bill that would impact tech companies turned out to be a catalyst for a selloff in these stocks over the past few sessions," said Quincy Krosby, chief market strategist at Prudential Financial.
Krosby noted that weakness toward the afternoon was worrisome.
"Typically, you don't want to see markets sell off toward the end of the session. Though if we were to get a slight pullback, it would be just normal and set us up for a Santa rally in a few weeks," Krosby said.
Don't miss:If you're panicking over tech stocks and taxes, here's a good reason to stop (http://www.marketwatch.com/story/if-youre-panicking-over-tech-stocks-and-taxes-heres-a-good-reason-to-stop-2017-12-05)
Which stocks look like key movers?
Home builders were among the worst-hit stocks after disappointing earnings from Toll Brothers Inc. (TOL) , whose shares tumbled 7.4% on Tuesday. Competitors PulteGroup Inc.(PHM) fell 1.3%, while Lennar Corp.(LEN) dropped 0.9%.
Mastercard Inc.'s stock (MA) rose 1.2% after the payments company announced a new $4 billion stock buyback program, along with a dividend hike (http://www.marketwatch.com/story/mastercard-to-buy-back-4-billion-in-stock-hike-dividend-2017-12-05).
Regal Entertainment Group's stock (RGC) jumped 9.4% after British counterpart Cineworld Group PLC(CINE.LN)agreed to buy it for $3.6 billion (http://www.marketwatch.com/story/cineworld-buying-regal-for-36-billion-to-reach-into-us-movie-theater-market-2017-12-05), creating the world's second-largest operator of movie theaters. Regal confirmed last week (http://www.marketwatch.com/story/regal-entertainments-stock-soars-after-confirming-buyout-talks-with-cineworld-2017-11-29) that it was in buyout talks with Cineworld (CINE.LN) .
Shares of Amazon.com Inc.(AMZN) rose 0.7% as the e-commerce giant launched its full offering in Australia on Tuesday, but analysts said it was a "patchy" initial effort (http://www.marketwatch.com/story/amazon-finally-launches-in-australia-but-its-a-patchy-start-2017-12-05). The foray has been expected to provide an important new beachhead for the online retailer's global distribution network (https://www.wsj.com/articles/welcome-to-the-jungle-amazons-australian-expedition-to-rattle-retailers-1495013400?mod=mktw).
Shares of car-parts seller (http://www.marketwatch.com/story/autozone-shares-jump-6-premarket-after-better-than-expected-earnings-2017-12-05)AutoZone Inc.(AZO) rose 0.4% and clothing manufacturer (http://www.marketwatch.com/story/g-iii-apparel-shares-surge-6-premarket-after-profit-beat-and-raised-guidance-2017-12-05)G-III Apparel Group Ltd.(GIII) rallied 14% as the companies posted better-than-expected quarterly earnings.
What are other assets doing?
European equities (http://www.marketwatch.com/story/european-stocks-hampered-by-losses-for-tech-shares-2017-12-05) largely closed lower, and Asian markets mostly closed with losses (http://www.marketwatch.com/story/tech-stock-selloff-weighs-on-asian-markets-2017-12-04), as drops for tech stocks weighed on those markets. Oil futures (http://www.marketwatch.com/story/oil-prices-hold-steady-after-soft-start-to-the-week-2017-12-05) were up modestly, while gold futures fell. The ICE U.S. Dollar Index (http://www.marketwatch.com/story/pound-slides-to-6-day-low-as-brexit-talks-hit-deadlock-again-2017-12-05) inched higher to 93.362.
The British pound slumped to an almost one-week low on Tuesday, hurt by concerns over the U.K.'s Brexit talks hitting another wall.
What are the economic data signaling?
The U.S. trade deficit in October jumped (http://www.marketwatch.com/story/us-imports-record-amount-of-goods-from-china-mexico-europe-as-trade-deficit-soars-2017-12-05)8.6% to a ninth-month high of $48.7 billion from $44.9 billion. Economists polled by MarketWatch had forecast a $47.6 billion gap.
The Institute for Supply Management's index of service-oriented companies (http://www.marketwatch.com/story/us-businesses-still-growing-rapidly-even-after-tapping-brakes-in-november-ism-finds-2017-12-05) such as banks and retailers fell to 57.4% in November from a 12-year high of 60.1% in October.
Numbers over 50% are viewed as positive for the economy, however, and anything over 55% is considered exceptional.
(END) Dow Jones Newswires
December 05, 2017 16:39 ET (21:39 GMT)Copyright (c) 2017 Dow Jones & Company, Inc.