On Monday, Wall Street moved away from the record levels reached last week, brought down by a drop in Apple following a report stating it would be making less of their latest smartphone, the iPhone X.
In early trading Apple dropped 1.42 percent after the Nikkei reported that Apple will cut in half its iPhone X production target for the first quarter to around 20 million units. The report added to the increased concerns regarding subdued sales of the phone prior to the company reporting its quarterly results on Thursday.
Alphabet , Facebook, Microsoft and Amazon are also scheduled to report results later this week, as well as Dow components Pfizer and DowDuPont.
“The upcoming results should provide further evidence of a strong earnings season under way,” Peter Cardillo, chief market economist stated. “Investors’ confidence remains strong and it is likely to strengthen. However, the amount of money being poured into stocks is one more reason to be more cautious than ever.”
Fourth-quarter earnings growth for the S&P 500 is now estimated at 13.2 percent, according to data, up from 12 percent at the beginning of the year.
At 9:40 a.m. EST, the Dow Jones Industrial Average was down 14.74 points, or 0.06 percent, at 26,601.97, the S&P 500 was down 3.62 points, or 0.12 percent, at 2,869.25. The Nasdaq Composite was down 12.48 points, or 0.17 percent, at 7,493.29. The three major U.S. indexes are coming off their best four-week run in two years, driven by not only strong earnings but economic data as well.
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U.S. Treasury yields were at multi-year highs, adding to last week’s gains from strong economic data and investors prepared for major central banks to step back from loose monetary policies.
Although it’s not expected for the Federal Reserve to lower interest rates at its meeting beginning Tuesday, Fed Chair Janet Yellen’s final statement will be dissected for any hint of the future course of rate increases.
Nine of the eleven major S&P sectors were lower, with telecommunications index leading with a 1.6 percent decline.
Declining issues outnumbered advances on the NYSE by 2,011 to 731. On the Nasdaq, 1,531 issues fell and 1,002 advanced.