Wall Street’s major indexes fell on Wednesday, stalling the rally that marked the start of 2018, after a report that China is considering slowing its purchases of U.S. government debt.
Bank stocks were largely favored as U.S. Treasury yields jumped to 10-month highs after Bloomberg reported the U.S. bond market was becoming less attractive for Beijing, one of the largest foreign holders of U.S. government debt.
The report weakened the dollar, which slipped 0.4 percent, while gold jumped to its highest in four months.
At 11:03 a.m. ET, the Dow Jones Industrial Average .DJI was down 39.3 points, or 0.15 percent, at 25,346.5 and the S&P 500 .SPX was down 5.27 points, or 0.19 percent, at 2,746.02.
The Nasdaq Composite .IXIC was down 29.08 points, or 0.41 percent, at 7,134.49.
The CBOE Volatility index .VIX, a widely followed measure of market anxiety, rose to its highest level in more than a week at 10.41.
“We’ve had a tremendous run, mostly unabated since Trump’s election in 2016 and with no volatility. If we do see a pullback, that’s going to be a buying opportunity,” said Michael Scanlon, managing director of Manulife Asset Management.
The S&P and the Nasdaq have closed at record highs on all days in 2018, on optimism over global growth and expectations of a strong quarterly earnings.
Wells Fargo (WFC.N) and JPMorgan (JPM.N) rose about 0.8 percent each. The two largest U.S. lenders will kick off the fourth-quarter earnings season on Friday.
Earnings for S&P 500 companies are expected to increase by 11.8 percent, with biggest contribution from the energy sector, according to Thomson Reuters I/B/E/S.
“It will be the first time that Corporate America has the ability to talk about guidance that incorporates lower tax rates. It’s going to be confusing and noisy but will be fascinating,” said Art Hogan, chief market strategist at B. Riley FBR in Boston.
Berkshire Hathaway (BRKb.N) rose 0.7 percent after the conglomerate promoted two of its top executives, cementing their status as the most likely successors to Warren Buffett.
Nine of the 11 major S&P sectors were lower, led by a 1.6 percent fall in interest-rate sensitive real estate and 0.8 percent drop in utilities .SPLRCU.
However, the Dow Jones Transport index .DJT, an indicator of economic activity, rose 0.6 percent, boosted by airline stocks.
No.2 U.S. homebuilder Lennar Corp (LEN.N) fell 0.12 percent after its profit missed estimates due to a delay in the booking of a single large transaction.
Nordstrom (JWN.N) was down about 7 percent after the retailer reported holiday period same-store sales.
Nvidia (NVDA.O) slipped 0.5 percent after the chipmaker said some of its chipsets have been affected by a memory corruption flaw.
Declining issues outnumbered advancers on the NYSE by 1,901 to 914. On the Nasdaq, 1,751 issues fell and 1,060 advanced.
REUTERS
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