By Joseph Adinolfi and Barbara Kollmeyer, MarketWatch
Nasdaq Composite flirts with positive territory
U.S. stocks traded lower Friday, leaving the Dow on track to see
its record run snapped, weighed by a tumble in shares of
UnitedHealth Group.
Market participants have attributed the stall-out to investors
taking a breather, after a string of healthy gains and Wall
Street's reluctance to make bullish bets ahead of the Presidents
Day holiday.
The Dow Jones Industrial Average eased by 68 points, or 0.3%, to
20,549, with a 3% drop in UnitedHealth Group Inc. (UNH) responsible
for the bulk of the blue-chip benchmark's decline. The company, the
country's largest health insurer, is being sued by the Justice
Department for allegedly overcharging Medicare, according to
reports
(https://www.nytimes.com/2017/02/16/business/dealbook/unitedhealthcare-improperly-took-money-from-medicare-suit-says.html?_r=1).
The insurer was cutting about 50 points from the Dow industrials in
late-morning trade.
The S&P 500 index slipped 4 points, or 0.1%, to 2,343, with
financials and telecommunications shares leading the broad-market
index lower.
The Nasdaq Composite Index bounced around between small gains
and losses, and was trading most recently trading flat at
5,813.
Euphoria surrounding President Donald Trump's proposed economic
policies--fueled by optimism around the prospect of tax cuts and
increased infrastructure spending--have helped to push U.S. stocks
to all-time highs.
But Mohannad Aama, managing director at Beam Capital Management,
expects the market to take an extended breather, he said, because
"we've fully priced in the potential for policy improvements as it
relates to the stock market."
In deal news, shares of Kraft Heinz Co.(KHC)and Unilever
PLC(ULVR.LN)(UNA.AE) (ULVR.LN)rocketed higher after Kraft said
Unilver had rejected its initial merger offer. The company
indicated that talks were still ongoing
(http://www.marketwatch.com/story/kraft-heinz-confirms-merger-proposal-with-unilver-was-declined-2017-02-17).
Need to Know:Tempted to cash in on the market rally? Why Tesla
may be a good place to start
(http://www.marketwatch.com/story/tempted-to-cash-in-on-the-market-rally-why-tesla-may-be-a-good-place-to-start-2017-02-17)
Driven by losses in the energy sector, U.S. stocks pulled back
from a string of simultaneous records on Thursday
(http://www.marketwatch.com/story/us-stocks-in-holding-pattern-after-best-record-run-in-25-years-2017-02-16),
with only the Dow managing to eke out a fresh high--it gained less
than 0.1% to close at 20,619.77. The S&P 500 index closed down
0.1% to 2,347.22, and the Nasdaq also lost 0.1% to finish at
5,814.90.
The pullback came partly after a White House news conference in
which Trump revealed that tax-reform proposals
(http://www.marketwatch.com/story/trump-says-health-care-proposal-coming-in-march-2017-02-16)
will take precedence only after a push to replace Obamacare in
March.
This announcement could lead to an extended decline in stocks,
said Lee Wild, head of equity strategy at Interactive Investor. "A
pullback on tax reform seems to be the biggest banana skin" for
investors, Wild said in a note to clients.
Opinion:Trump's tax reform looks like just another of his tweets
(http://www.marketwatch.com/story/trumps-tax-promise-looks-like-just-another-of-his-tweets-2017-02-16)
Others believe the market rally could have more room to run once
investors have a clearer picture of Trump's plans for tax reform
and the health-care overhaul.
"I still remain optimistic on the market going forward," said
Gary Anetsberger, chief executive officer at Millennium Trust
Co.
For the week, the Dow industrials are on pace to gain 1.4%,
while the Nasdaq Composite and S&P 500 are looking at advances
of 1.1% and 1.2%.
The Presidents Day holiday will shutter stock and bond markets
on Monday (), meaning there may be little appetite to build new
positions on Friday, Wild said.
Read:Investors might finally be recognizing risk in the stock
market
(http://www.marketwatch.com/story/investors-might-be-finally-recognizing-risk-in-the-stock-market-2017-02-16)
In the lengthy and wide-ranging news conference on Thursday,
Trump spoke of inheriting a "mess"
(http://www.marketwatch.com/story/a-look-at-the-economy-trump-inherited-which-he-calls-a-mess-2017-02-16)
from President Barack Obama and sparred with members of the media
and the mainstream media more generally.
Wild noted that the market will be eager to hear what the
president has to say in an address to Congress on Feb. 28.
(http://projects.marketwatch.com/2017/trump-today-signup/)
Stock movers: Shares of Deere & Co.(DE)rose 1.3% after
earnings and sales beat forecasts. The maker of construction
equipment offered up an upbeat outlook
(http://www.marketwatch.com/story/deeres-stock-jumps-after-profit-and-sales-beat-upbeat-outlook-2017-02-17).
J.M. Smucker Co. shares(SJM)fell 4.3% after the jam maker's
results.
Campbell Soup Co. shares(CPB)fell 5% after second-quarter profit
and revenue missed forecasts.
General Mills Inc. shares(GIS)fell 3.2% after the company
lowered its sales outlook
(http://www.marketwatch.com/story/general-mills-shares-drop-after-it-lowers-sales-outlook-2017-02-17).
Read:What to expect from Deere earnings
(http://www.marketwatch.com/story/deere-earnings-what-to-expect-2017-02-16)
Shares of WebMD Health Corp.(WBMD)were halted late Thursday
after the online health information group said it may put itself up
for sale
(http://www.marketwatch.com/story/webmd-stock-halted-company-may-sell-itself-2017-02-16).
But the shares were flat in recent trade.
Other markets: Asian stocksfinished mostly lower after U.S.
stocks largely stepped back from their record run. European
stocksslipped
(http://www.marketwatch.com/story/european-stocks-slip-trimming-their-gain-for-the-week-2017-02-17).
The dollarwas slightly lower against the yen
(http://www.marketwatch.com/story/dollar-flattens-out-ahead-of-three-day-weekend-in-the-us-2017-02-17).
Oil prices
(http://www.marketwatch.com/story/oil-prices-rise-moderately-on-hopes-for-more-cuts-from-opec-2017-02-17)declined,
while gold was essentially flat.
(END) Dow Jones Newswires
February 17, 2017 10:59 ET (15:59 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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