Stock prices were mixed Monday as investors awaited the release of key employment reports and a two-day meeting of the Federal Reserve Board.
The Dow Jones Industrial Average fell 14.05 points to 13,881.93, only the fifth down session so far in January. The Nasdaq Composite Index gained 4.59 points to 3,154.30 and the S&P 500 Stock Index slipped 2.78 points to 1,500.18.
The Commerce Department reported orders for durable goods rose 4.6 percent in December benefiting from an 11.9 percent increase in transportation orders.
Commodities were slightly lower. Gold fell $3.70 to $1,652.90 an ounce and gold lost 56 cents to $96.14 a barrel.
AK Steel Holding Corp. (NYSE: AKS) lost 7.4 percent after Goldman Sachs Group Inc. (NYSE: GS) downgraded the shares. Caterpillar Inc. (NYSE: CAT) added 2 percent as it forecast faster growth in the year’s second half. Facebook Inc. (Nasdaq: FB) rose 3 percent as options traders were the most bullish on the shares on record. Apple Inc. (Nasdaq: AAPL) climbed 2.3 percent, after its worst weekly slump since 2008. Yahoo! Inc. (Nasdaq: YHOO) jumped 4.7 percent in late trading after posting its results.
“The sentiment is really, really bullish,” Barry James, who helps oversee $3.5 billion as president of James Investment Research in Xenia, Ohio, said in a phone interview. “That is a little bit of a warning sign to us that we could be more in a topping phase than actually a new bull phase. It would take a lot to really convince everyone that happy days are here, and we can just ride this off into the sunset.”
The S&P 500 has more than doubled from a 12-year low in 2009 as corporate earnings have climbed for three years and the Federal Reserve has increased its bond purchases to keep interest rates low to spur growth. The S&P 500 is about 4.2 percent below its all-time high of 1,565.15 set in October 2007.
“The earnings numbers at this point really have to come through and validate where the market is,” Mark Freeman, who oversees about $14 billion as chief investment officer at Westwood Holdings Group Inc. in Dallas, said in a phone interview. “The market wants to see the numbers, if you will.”
The S&P 500 has rallied 5.2 percent this month for the best start of a year since 1987. Pension funds may need to sell stocks and buy fixed income to rebalance their asset allocations by the end of the month, according to Societe Generale SA. U.S. pensions may pull $22 billion from equities, strategist Ramon Verastegui wrote in a note.
Six out of 10 S&P 500 groups fell Monday as raw-material shares dropped the most, sinking 1 percent. An S&P index of homebuilders snapped a six-day rally, losing 2 percent, as PulteGroup Inc. (NYSE: PHM) slid 3.3 percent to $20.96.
PetSmart Inc. (Nasdaq: PETM) dropped 9.1 percent to $63.64 for the biggest retreat in the S&P 500. The pet-store chain was cut to reduce from neutral by Nomura Holdings Inc. (NYSE: NMR). The company faces increased competition from Internet retailer Amazon.com Inc. (Nasdaq: AMZN), analyst Aram Rubinson wrote in a note.
Jos. A. Bank Clothiers Inc. (Nasdaq: JOSB) plunged 15 percent, the most in more than four years, to $39.28. The maker of men’s apparel said annual profit will fall 20 percent amid lost sales from unseasonably warm weather and U.S. political uncertainty as lawmakers wrangled over tax increases and budget cuts.
Hess Corp. (NYSE: HES) climbed 6.1 percent, the most in the S&P 500, to $62.48. The energy producer will sell its terminal network and exit the refining business as activist shareholder Elliott Associates LP announced plans to buy a more-than $800 million stake and seek board seats.