US stocks edged lower today, with major indexes pulling back from record levels as the recent rally lost steam, and the trend of modest moves and low volume continued heading into the final trading day of the year.
Despite the modest move lower, the day’s losses were broad, with eight of the ten primary S&P 500 sectors in the red. Utilities – 2014’s best sector performer – led the decline with a drop of 1.7 percent. Financials and materials managed to move just above the unchanged mark.
Equities have been trending to the upside recently, buoyed by strong economic data and the US Federal Reserve’s commitment to be «patient» about raising interest rates. After the S&P 500 gained nearly 6 percent over the prior eight sessions, it notched its 53rd record close of the year on Monday, while the Dow just narrowly extending its streak of positive sessions to eight.
The speed and scale of the rally could push traders to take profits, and volatility could be amplified with many market participants out for the holiday, which stifles volume. The stock market will be closed on Thursday for the New Year’s holiday.
The Dow Jones industrial average fell 48.51 points, or 0.27 percent, to 17,989.72, the S&P 500 lost 7.43 points, or 0.36 percent, to 2,083.14 and the Nasdaq Composite dropped 23.71 points, or 0.49 percent, to 4,783.20.
In Europe, shares were falling, the last full trading day of the year, led lower by energy companies as Brent oil fell to a 5-1/2-year low on persistent concerns about a global supply glut.
The STOXX Europe 600 oil & gas index was down 1.9 percent, taking its loss for the year to 15 percent. The price of Brent oil is down by about half since June due to a big oversupply and tepid demand, hitting energy companies hard.
Explorers Seadrill and Tullow Oil were down around 3 percent. The UK FTSE 100 index fell 0.9 percent, underperforming its European peers, with London-listed energy majors BP and Shell down some 2 percent.
UK retailer Next bucked the trend, rising 3.2 percent after it lifted its full-year profit guidance on the back of a 2.9 percent rise in sales in the run up to Christmas.
Trading activity was broadly subdued, with uncertainty in Greece also weighing on markets ahead of a January election that the leftist anti-bailout Syriza party is tipped to win after years of recession.
Greek shares were down 0.2 percent after falling nearly 4 percent on Monday, when the parliament in Athens failed to elect a head of state, triggering the early vote.
The FTSEurofirst 300 index of pan-European shares was down 0.5 percent at 1,369.61 points. The index has however gained 4 percent year-to-date, helped by expectations that the European Central Bank will unveil more market-friendly measures to stave off deflation.
Meanwhile, Japanese stocks ended 2014 on a down note today, as investors closed positions before extended new year holidays and worries about Greek politics sapped risk appetites.
The Nikkei benchmark shed 1.6 percent to close at 17,450.77. The index gained 7.1 percent for the year, driven by aggressive asset purchases by the Bank of Japan and a weaker yen that boosted corporate profits. In 2013, it soared 57 percent on the back of Prime Minister Shinzo Abe’s easy-money policies.
Japanese markets will be closed until Jan. 5.
Source: Buenos Aires Herald