Tech, Bank Stocks Set Wall St. for Second Day of Losses

(Reuters) -

U.S. stocks slipped on Thursday and were headed for a second day of losses as bank and technology stocks came under pressure.

The S&P 500 financial index dropped 1.01 percent, after having risen nearly 20 percent in 2016. The technology index, which has risen 13 percent this year, was down 0.13 percent.

U.S. equities had been enjoying a rally ever since Donald Trump was elected president in November on bets that the economy would benefit from his plans to introduce tax cuts, deregulation and higher infrastructure spending.

The near two-month rally has seen the three main Wall Street indexes rack up double-digit percentage gains, but has left some market participants nervous about a potential correction.

The S&P 500 index suffered its biggest one-day percentage drop on Wednesday, following weak housing data and losses in the technology sector. The triple-digit loss on the Dow pulled it further away from its march towards 20,000.

The effects of a strong weekly jobs report, which supported slight gains during an earlier session, were quick to fade.

“The market is looking like it has gotten a bit ahead of itself, and while I’m not turning bearish, I am becoming a bit more cautious in the near-term,” said Robert Pavlik, chief market strategist at Boston Private Wealth.

“I wouldn’t be surprised to see the market begin the year with a little bit of a rally and start to give back quickly.”

At 12:51 p.m. ET the Dow Jones Industrial Average was down 5.66 points, or 0.03 percent, at 19,828.02.

The S&P 500 was down 1.05 points, or 0.04 percent, at 2,248.87.

The Nasdaq Composite was down 8.89 points, or 0.16 percent, at 5,429.67.

Six of the 11 major S&P 500 sectors were lower, led by losses in financials and energy.

Defensive utilities, real estate and telecom services — which have largely underperformed in the post-election rally — were the top gainers as investors hunted for year-end bargains.

Bank of America, Citigroup and Morgan Stanley were down more than 1.7 percent each. Goldman Sachs and JPMorgan weighed the most on the Dow.

Drug developer Cempra lost more than half of its value after the U.S. Food and Drug Administration rejected its antibiotic treatment for pneumonia.

Advancing issues outnumbered decliners on the NYSE by 1,614 to 1,236. On the Nasdaq, 1,471 issues fell and 1,303 advanced.

The S&P 500 index showed one new 52-week high and three new lows, while the Nasdaq recorded 55 new highs and 34 new lows.