U.S. stocks closed lower on Monday as investors found few reasons to keep pushing shares higher following an extended rally that took major indexes to a string of records and lifted major indexes for three straight weeks.
The S&P 500 SPX, -0.53% dropped 11.63 points, or 0.5%, to finish at 2,201.72. Utilities and telecom, which are viewed as defensive groups, were among the biggest outperformers of the day. The financial sector was the biggest decliner, off 1.4%, with Bank of America Corp. BAC, -2.68% falling 2.7%. The Dow and S&P both snapped four-day win streaks.
Wall Street has rallied throughout November, with the gains particularly strong since Donald Trump’s unexpected presidential election victory. Investors expect that the president-elect will advocate for policies—such as infrastructure spending, massive corporate tax cuts and environmental and financial deregulation—that could spur economic growth.
“We were conservatively positioned going into the election, but with the results being what they were, we increased our equity allocation and decreased our position in bonds. A lot of firms have done that, which is why we’ve seen this three-week rally that’s been straight up,” said Phil Orlando, chief equity strategist at Federated Investors. “Following gains like that, it isn’t surprising to see a consolidation like this.”
Mark Hulbert: How Wall Street reacts to election recounts
Stocks were left overbought as investors have placed faith in promises of stronger growth and less regulation under a Trump presidency, said Paul Nolte, portfolio manager at Kingsview Asset Management.
“It’s about time,” Nolte said of the Monday pulback. “It’s been a fairly strong move persistently higher with last-hour rallies. The market is due for a little bit of a pullback.”
Other markets: Crude futures CLF7, -0.51% jumped 2.2% to settle at $ 47.08 a barrel on Monday, following a 4% slide on Friday that came after Saudi Arabia refused to attend a Monday meeting with Russia about a possible output cut.
European stocks SXXP, -0.77% lost ground, and Asian markets finished mostly lower. Gold futures GCG7, -0.03% for February settled up 1.1% at $ 1,193.80 as a key dollar index DXY, +0.20% declined 0.2%.
Amazon.com Inc. AMZN, -1.74% and other retailers were in focus as Cyber Monday-related shopping draws attention. Bookseller Barnes & Noble Inc. BKS, -2.32% said it’s offering a 15% discount on an entire online order as part of its promotion on this big day for e-commerce. Shares of Amazon fell 1.7% while Barnes & Noble finished down 2.3%.
H&R Block Inc. HRB, -9.01% shares dropped 9% after BTIG downgraded the stock.
—Victor Reklaitis in London contributed to this report.
Toy Teslas, trucks sport realistic details
Battery-powered vehicles for kids have become increasingly popular over the years. They’ve also become more realistic.