You are here

US: Stocks rally finally shows signs of fatigue


[NEW YORK] Wall Street stocks finished mixed on Thursday as a five-day streak of record highs finally began to show signs of fatigue.

The Dow Jones Industrial eked out another record close, but the S&P 500 and Nasdaq both declined, ending a stretch in which all three major indices closed at records.

Stocks have been on a tear since President Donald Trump on February 10 pledged to introduce his promised a tax-cut plan soon.

Analysts have noted that the outlook for the policies remains murky due to questions about how the tax cut cuts will be financed, as well as various White House controversies, most recently over Mr Trump's relationship with Russia.

Market voices on:

But analysts attributed the pause to profit taking more than to a rising concern that Mr Trump's programme could be derailed.

"Valuations are stretched, so it would not be a surprise to see investors take some chips off the table," said Bill Lynch, director of investment at Hinsdale Associates.

The Dow Jones Industrial Average added less than 0.1 per cent to finish at 20,619.84, less than eight points higher than Wednesday's close.

The broad-based S&P 500 dipped 0.1 per cent to 2,347.23, and the tech-rich Nasdaq Composite Index also lost 0.1 per cent to end at 5,814.90.

Cisco Systems jumped 2.4 per cent after reporting second-quarter earnings of 57 cents per share, a penny above analyst expectations.

Coca-Cola gained 1.9 per cent after announcing it was hiking its quarterly dividend by six percent to 37 cents per share.

Kraft Heinz fell 4.2 per cent after reporting a 3.7 per cent drop in fourth-quarter revenues to US$6.8 billion. Other food companies also declined, with Mondelez International losing 4.8 per cent and Kellogg 1.8 per cent.

TripAdvisor dropped 11.0 per cent after reporting earnings of just US$1 million in the second quarter. Analysts warned that heavy investments in marketing will pressure profits in 2017.