Stocks fell Monday as uncertainty over potential policy moves from Donald Trump weighed on Wall Street, while the energy sector led the decline.
The Dow Jones Industrial Average fell 0.15% to trade at 20,041 after rising slightly earlier in the session. The S&P 500 was down 0.3%, and the Nasdaq dropped 0.2%.
"Everybody is still trying to process some of the political developments that we have had recently," Brad McMillan, Commonwealth Financial Network chief investment officer, said in a phone interview. "There's a lot of reassessment going of some of those positive expectations. I think that's why you are seeing the pullback."
All sectors were in negative territory as the energy sector led the decliners, down almost 1%, followed by real estate, which dropped 0.6%.
"Generally, the overall trend is higher, but investors are also realizing that valuations are expensive," said Sam Stovall, CFRA's chief investment strategist, in a phone interview. "We are really sort of digesting the unemployment data that we got last week and whether it's an indication that the economy is on the upswing continued with the prospect that Donald Trump is actually doing what he said he would do during the campaign and whether that would then translate into expectations for tax cuts, repatriation, infrastructure spending, etc., but again still light on details."
West Texas Intermediate crude oil settled down 1.5% to $53.01 a barrel. Stifel analysts said the addition of 17 oil rigs last week for a total of 583 rigs, "continues the relentless rig count build in the U.S."
"The U.S. activity increase will in time lead to incremental supply, which should offset the OPEC/Non-OPEC cut, and have a dampening effect on oil prices," Stifel analysts wrote in a note.
"The bigger concern is the breakdown in the relations between the Trump administration and the Congress," McMillian said. "We started to see relations between the administration and the Congress start to fray a little bit. Being able to work together effective maybe isn't as probable as we thought it was."
The Dow closed above the 20,000 level for the first time in a week on Friday as the financials sector led the charge. Goldman Sachs (GS) and Bank of America (BAC) were among the bank stocks posting slight gains early on Monday but they weren't seeing the same momentum after the president signed an executive order aimed at easing financial regulations.
"We usually have some sort of digestion of gains after hitting a millennial mark on the Dow," Stovall said. "We actually hit two millennial marks without going through a decline of 5% or more, so I think investors might be worried that we are in need of some sort of digestion of recent gains."
Trump's executive order that banned immigrants from seven majority-Muslim countries from entering the U.S. also continued making waves. A federal appeals court on Sunday denied the Trump administration's request to set aside a Seattle judge's ruling that put a hold on the ban nationwide.
Apple (AAPL) , Alphabet's (GOOGL) Google, Facebook (FB) , Microsoft (MSFT) , Netflix (NFLX) , Twitter (TWTR) and a number of other tech companies filed legal briefs on Sunday with a federal appellate court saying Trump's immigration ban damages their businesses. The briefing said the executive order leads to increased costs, makes the companies less competitive internationally, and hinders their ability to hire qualified talent. Apple shares were gaining about 1% on Monday.
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Tiffany (TIF) shares fell 2.4% as the company announced that CEO Frederic Cumenal would resign immediately, less than two years after he assumed the position. Board Chairman and previous Tiffany CEO Michael J. Kowalski will serve as interim CEO. The company also maintained its annual financial forecasts.
"The Board is committed to our current core business strategies, but has been disappointed by recent financial results," Kowalski said in a statement. "The Board believes that accelerating execution of those strategies is necessary to compete more effectively in today's global luxury market and improve performance."
Toyota (TM) shares dropped almost 2% after the company reported a sharp drop in quarterly profit because of a stronger yen. It did, however, increase its guidance for the year and said to boost earnings it would focus on production of trucks and sport-utility vehicles.
Newell Brands (NWL) boosted its full-year earnings guidance and reported fourth-quarter earnings that met Wall Street's estimates. The stock declined 5.1% in early trading.
Toymaker Hasbro (HAS) jumped 13.7% after reporting fourth-quarter adjusted earnings of $1.64 a share, beating forecasts of $1.27. Revenue of $1.63 billion also topped Wall Street forecasts.
Food service company Sysco (SYY) posted fiscal second-quarter adjusted earnings of 58 cents share, beating forecasts by 4 cents. Shares of Sysco were down 2.9%.
Tyson Foods' (TSN) fiscal first-quarter earnings came in above Wall Street expectations and the meat producer raised its full-year outlook. The stock dropped almost 3.8%.
comScore (SCOR) shares plummeted over 27% after the company said that it would not be able to regain compliance with SEC periodic reporting requirements by the Feb. 23 deadline, in order to complete its financial restatement and comply with Nasdaq's listing requirements.
Aratana Therapeutics (PETX) shares fell 18.1% as the pet therapeutics company, said in a regulatory filing that it would delay the product launch of Entyce, used as an appetite stimulant, until later in 2017.