The stock market drifted lower in thin trading on Monday, pulling the Standard Poor’s 500-stock index back from a five-year high.
With little in the way of market-moving news, the S. P. 500 slipped 0.92 of a point to close at 1,517.01. Last week, the broad-market index edged up slightly to its highest level since November 2007.
Seven of the 10 industry groups within the S. P. 500 dropped.
Now, with major indexes near record highs, many think the stock market’s six-week rally is ready for a pause.
“The consensus seems to be that we’re due for a correction,” said Brian Gendreau, market strategist at the Cetera Financial Group. “If you compound the increase we’ve had so far, this year would be the best year ever for stocks. And nobody thinks that that’s going to happen.”
The best year ever for stocks? For the S. P. 500 index that was 1933, when the index rebounded 46 percent in the middle of the Great Depression.
Among other stock indexes on Monday, the Dow Jones industrial average dropped 21.73 points to 13,971.24. The UnitedHealth Group led the Dow lower, losing 62 cents to $57.12.
The Nasdaq composite fell 1.87 points to 3,192.00.
Trading volume was light, with 2.6 billion shares trading on the New York Stock Exchange. That stands in contrast to a two-month moving average of 3.4 billion.
Solid earnings reports have helped feed the rally in recent weeks. Of the 342 companies in the S. P. index that reported results through last week, two out of every three have beaten Wall Street’s earnings estimates, according to research from Goldman Sachs.
Mr. Gendreau gave three reasons he believed that stocks still had room to run. Even after the market’s recent surge, he said, the typical stock looks fairly priced when compared to underlying earnings. Corporations keep finding ways to increase profits, which helps push stock prices higher. And Americans looking for places to put their savings have few attractive alternatives.
“I’ll go out on a limb and say that I think earnings growth, attractive valuations and pent-up demand will add up to a fairly strong year for equities,” Mr. Gendreau said.
Apple’s stock gained $4.95, to $479.93, after The New York Times reported that the technology giant was developing a wristwatchlike device — in essence a smart watch — that would run the same operating system used for iPhones and iPads.
The stock market raced to a stunning start this year. The Dow and the S. P. 500 have already gained more than 6 percent for the year. The Nasdaq is up 5.7 percent.
Among the companies in the news on Monday, the Danish drug maker Novo Nordisk dropped 14 percent after the Food and Drug Administration refused to approve the company’s proposed diabetes treatments until it received more data, which the drug maker said it could not supply this year. Novo Nordisk’s depositary receipts lost $26.89, to $165.40.
Loews fell 34 cents, to $43.51, after it reported on Monday that it lost $32 million in its fourth quarter, hurt by insurance losses from Hurricane Sandy and sliding prices for natural gas. Loews, a holding company with dealings in insurance, oil and gas and hotels, is largely controlled by the Tisch family of New York.
Carnival, the cruise-ship operator, slipped 29 cents to $38.72 after an engine room fire over the weekend left its cruise ship Triumph stranded in the Gulf of Mexico.
In the bond market, interest rates showed little change. The price of the 10-year Treasury note fell 4/32, to 97, while its yield rose to 1.96 percent, from 1.95 percent late Friday.
Article source: http://www.nytimes.com/2013/02/12/business/daily-stock-market-activity.html?partner=rss&emc=rss
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