Stocks Slip After Hitting 2012 Highs, Hurt by Tech Stocks
NEW YORK (TheStreet) -- Major U.S. equity indices fell, reversing gains, after reaching their highest levels of the year earlier in the day. Technology stocks led the declines.
A comment from Dennis Lockhart, the president of the Federal Reserve Bank of Atlanta, that more monetary easing may not cure many of the current economic problems also contributed to the lost momentum.
The Dow Jones Industrial Average fell 68 points, or 0.5%, to 13,204.
The blue-chip index, which began the day up 8.6% so far in 2012, ran as high as 13,330.76 earlier in the day, coming within 10 points of its intraday high for the year and eclipsing its May 1 closing peak for 2012 of 13,279.32.Losers were outpaced gainers on the Dow 22 to 8. The biggest percentage winners were JPMorgan Chase (JPM), Cisco (CSCO), Kraft (KFT) and McDonald's (MCD). Blue-chip losers included Verizon (VZ), Merck (MRK), Walt Disney (DIS) and Hewlett-Packard (HPQ). The S&P 500 lost 5 points, or 0.4%, to 1,413.17. The index's session-peak of 1426.68 was a new high for 2012 and its best overall level since May 2008. The strongest sectors in the broad market were basic materials, financials, capital goods and consumer cyclicals. The weakest were technology and utilities. A big weight in the technology sector was Apple (AAPL), which reached a new intraday high of $674.88 at the start of the session, but slid 1.4% by the close. The stock was hit with a rare analyst downgrade by a little-known firm. The Nasdaq shed 9 points, or 0.3%, to 3,067. As has been the case throughout August, volume was comparatively light with just 3.23 billion shares changing hands on the New York Stock Exchange and 1.56 billion shares in play on the Nasdaq. The market's initial rally was fueled by optimism that upcoming meetings between top eurozone officials later this week may result in progress on easing the continent's debt crisis. On Thursday, German Chancellor Angela Merkel and French President Francois Hollande plan to meet in Berlin. Later in the week, Greek Prime Minister Antonis Samaras is expected to request an extension for Greece to fulfill its fiscal objectives as the country works through onerous reforms. A senior lawmaker with Merkel's party said Tuesday that concessions are possible for Greece as long as Samaras shows a willingness to meet the main targets set out in his country's bailout program, according to Bloomberg. Samaras is expected to meet Merkel on Friday in Berlin and Hollande in Paris on Saturday. European markets got a lift Tuesday as borrowing costs declined at Spain's auction of shorter-term debt. The FTSE in London finished up 0.6% and the DAX in Germany closed up 0.8%. In other European developments, Moody's was reporting that troubled southern eurozone nations are benefiting from repair programs there. "The euro needs a friendly pat on the back from policymakers pretty much every day, or it goes off to sulk," said Nicholas Colas, chief market strategist at ConvergEx. There were no major U.S. economic releases on the docket Tuesday. The next big catalyst on the domestic front looks to be the release of the minutes of the Federal Reserve's late July meeting on Wednesday. "Traders could easily latch on to any section that shows there was a robust debate about further easing," said Dan Greenhaus, chief global strategist at BTIG. "That would leave us in an interesting position heading into the worst month of the year, September ... this might the set up for an interesting short trade."
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