By William Watts and Sunny Oh
Stocks closed lower as Wall Street investors found few reasons to drive equity benchmarks further into record territory after markets ended last week at all-time highs.
What are major indexes doing?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.21% fell 123.04 points, or 0.4%, to close at 34,077.63, marking the first decline for blue chips after three straight gains.
The S&P 500 /zigman2/quotes/210599714/realtime SPX -0.11% slid 22.21 points, or 0.5%, to 4,163.26, halting a two-session win streak.
The Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP -0.82% fell 137.58 points, or 1%, to 13,914.77, also closing lower for the first time in three sessions.
The small-cap Russell 2000 /zigman2/quotes/210598147/delayed RUT -0.21% finished down 30.67, or 1.4%, at 2,232.
The Dow and S&P 500 closed at records on Friday , while the Nasdaq Composite booked its second-highest finish of all time. For the week, the Dow rose 1.2%, while the S&P 500 gained 1.4% and the Nasdaq Composite advanced 1.1%. It was the fourth straight weekly rise for the Dow and S&P 500, while the Nasdaq booked its third consecutive weekly gain.
What’s driving the market?
Although equities on Monday took a breather from last week’s record advance, analysts said the tone remained constructive given a lack of any major negative catalysts.
“Overall, it looks like clear skies for equity markets. Policy makers are still holding investors by the hand and vaccination programs have accelerated dramatically,” said Marios Hadjikyriacos, investment analyst at XM, in a note.
Half of all adults in the U.S. have received at least one COVID-19 shot , the Centers for Disease Control and Prevention reported Sunday, as the vaccination campaign hit another milestone.
“The only real risks on the radar are excess inflation that leads the Fed to shift gears abruptly, some new vaccine-resistant variant, or the geopolitical temperature rising further in critical theaters like Ukraine or Taiwan,” Hadjikyriacos said.
Some investors, however, warn that the market’s rise to record altitudes may make a retreat more likely.
“The rising tide is lifting all boats, but the recent rally shows a reversal of the relative year-to-date trends,” wrote Mark Hackett, Nationwide’s chief of investment research, in a Monday research note.
“Sentiment indicators suggest the market may be at risk for a pullback. The AAII Sentiment Survey shows 57% of respondents are bullish, the highest level in over three years. Fund flows reinforce this trend, with greater equity flows in the past five months tan in the prior 12 years combined,” Hackett said.
Stocks received a lift last week as earnings season got under way with solid results from big banks and as investors digested strong economic data.