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US: S&P 500, Nasdaq end at records for fifth day; Dow ends lower

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[NEW YORK] The S&P 500 and Nasdaq finished at records for the fifth straight session Monday, but the Dow suffered its first decline of 2018.

The broad-based S&P 500 added 0.2 per cent to end the session at 2,747.71, while the tech-rich Nasdaq Composite Index rose 0.3 per cent to close at 7,157.39.

But the Dow Jones Industrial Average dipped 0.1 per cent to 25,283.00.

US stocks were on a tear last week, with all three major indices notching repeated records on the basis of good US economic data and optimism about corporate earnings after President Donald Trump signed a big tax cut into law last month.

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But the lofty state of the market has started to raise questions about equity valuations, heading into the quarterly earnings season.

JPMorgan Chase and Wells Fargo kick off the earnings period for big US corporations on Friday.

"The guidance will be more important than ever," said Art Hogan, chief market strategist at Wunderlich Securities, referring to the corporate statements on expected profit.

Investors so far have not shown much concern about the one-term hit announced by many large companies as they repatriate foreign earnings to the United States, as a result of the recent tax reform.

But sentiment could shift throughout the course of the earnings period, analysts said.

"The question is how are people going to interpret companies that give lower earnings guidance to pay for their taxes," said Phil Davis of PSW Investments. "It is short-term, but you know investors are not very patient."

Gainers in Monday's session included Dow-component Caterpillar, which jumped 2.5 per cent following an upgrade by JPMorgan Chase, and Tesla Motors which surged 6.3 per cent after underperforming other technology companies last week.

Retailers such as Wal-Mart Stores and Target were higher, while media companies, including Comcast and Disney, fell.

GoPro slumped 12.8 per cent after announcing it would cut more than 20 per cent of its staff following weak holiday-season sales.

The camera and technology company has hired JPMorgan to advise it on strategic options, including a possible sale, a person familiar with the matter told AFP.

AFP