Stocks slip, pulling Dow back near 17,000
NEW YORK — After pushing stocks to records last week, investors turned cautious on Monday ahead of a batch of corporate earnings reports.
The Dow Jones industrial average ended almost 50 points lower after closing above 17,000 for the first time last week. Investors moved money into stocks traditionally thought of as safer than the broader market: utilities, telecommunication companies and consumer staples such as soft drinks and detergent.
Stocks that depend the most on a growing economy were among the biggest decliners, including small companies, consumer discretionary names, materials and industrial stocks.
“All eyes have turned to earnings,” said Joe Tanious, global market strategist with J.P. Morgan Funds.
There’s a lot riding on this quarter’s earnings season. Investors largely believe the weather had an unusually large impact on the U.S. economy in the first three months of year, and that economic activity rebounded in the second three months of this year.
Many companies blamed the weather for their disappointing first quarter results.
Secondly, stocks are trading at all-time highs and investors will need Corporate America to deliver on profits in order to justify these record-high prices.
“As we’ve emphasized in recent weeks, stocks are not cheap, but we believe they can climb modestly higher in the second half (of the year) amid continued economic improvement,” said Russ Koesterich, global chief investment strategist at BlackRock, in a note to investors.
The Dow Jones industrial average lost 44.05 points, or 0.3 percent, to 17,024.21. The Standard & Poor’s 500 index lost 7.79 points, or 0.4 percent, to 1,977.65 and the Nasdaq composite fell 34.40 points, or 0.8 percent, to 4,45 1 . 53.
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