U.S. Stocks on Track to End Winning Streak
September 21 2017 - 3:24PM
Dow Jones News
By Michael Wursthorn and Riva Gold
-- U.S. stocks edge lower
-- Government bond prices, utilities stocks rise
-- European, Asian shares rise slightly
Declines in shares of technology and consumer-staple stocks
threatened to end major indexes' run of recent gains on
Thursday.
Some investors and analysts attributed the stall in the stock
market to lingering uncertainty after the Federal Reserve suggested
Wednesday that it was open to the possibility of an interest-rate
increase in December.
A streak of soft inflation data had made some investors
skeptical the Fed would raise rates again in 2017. The fact that
the central bank signaled otherwise caught some investors off
guard, portfolio managers said.
"The market is sorting through to what extent it needs to
incorporate future Fed activity into its thinking," said Mike
Allison, a portfolio manager with Eaton Vance. "There's some
uncertainty as to the impact since interest rates have been so low
for so long."
The Dow Jones Industrial Average slipped 36 points, or 0.2%, to
22376, on track for declines after nine consecutive sessions of
advances. The S&P 500 slid 0.2%, while the tech-heavy Nasdaq
Composite fell 0.3%.
Shares of consumer staple companies were among the S&P 500's
biggest decliners Thursday, falling 0.9% in the broad index. Beauty
products maker Coty fell 3.5%, while Procter & Gamble fell
1.8%.
Technology stocks, among the best performers in the S&P 500
for 2017, also came under pressure. Shares of Apple fell 1.3%, on
track for its worst two-day stretch since June, after the company
on Wednesday acknowledged problems with cellular connectivity in
its newest smartwatch.
Semiconductor stocks also fell, with Nivida off about 3% and
Advanced Micro Devices down 1.4%.
Even with Thursday's declines, U.S. stocks remained near their
all-time highs. Some investors said they are now looking ahead to
any policy developments in Washington that could provide further
direction for the stock market.
"I think imminently we will start to price in a tax cut or tax
reform," said Eddie Perkin, chief equity investment officer at
Eaton Vance. "Now is a time to be selling what has worked this year
and buying what has lagged," he said, adding that he is preparing
for a rotation out of technology and health-care stocks and into
shares of banks and companies currently hardest hit by taxes.
Others say they will remain wary of the possibility of monetary
policy hampering the stock rally.
Low interest rates have helped keep U.S. stocks climbing since
the financial crisis. A Fed that raises rates faster than the
economy can support could cause the stock rally to stall, investors
say.
"It seems like the Fed is on a modestly earlier time frame than
we had thought," said Jason Pride, director of investment strategy
for Glenmede Trust Co. "As with any policy tightening scenario, you
introduce the risk of a misstep due to the inability to measure the
impact correctly."
Elsewhere, the Stoxx Europe 600 rose 0.2%, led by a 1.4% advance
in bank stocks.
Japan's Nikkei Stock Average edged up 0.2% after the Bank of
Japan left its policy unchanged Thursday, sticking to its massive
stimulus program.
-- Kenan Machado contributed to this article.
Write to Michael Wursthorn at Michael.Wursthorn@wsj.com and Riva
Gold at riva.gold@wsj.com
(END) Dow Jones Newswires
September 21, 2017 15:09 ET (19:09 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.