NEW YORK: US stocks edged higher on Monday (Jan 8) as investors took stock after the strong rally that marked the start of 2018, but healthcare and bank shares weighed on Wall Street's three major indices.
Investors were focused on making marginal moves within their portfolios on a slow news day after the rally and before earnings season, said Jim Paulsen, chief investment strategist at The Leuthold Group in Minneapolis.
"The news lies ahead in terms of economic reports, earnings and earnings warnings. In the meantime, you'll take advantage of some of the price action," said Paulsen.
The Dow Jones Industrial Average dropped 12.87 points (0.05 per cent) to 25,283.00, the S&P 500 gained 4.56 points (0.17 per cent) to 2,747.71 and the Nasdaq Composite added 20.83 points (0.29 per cent) to 7,157.39.
The S&P 500's healthcare sector was the weakest performer of the S&P's 11 sectors with a 0.5 per cent decline on the first day of JP Morgan annual healthcare conference in San Francisco. It had risen 3.2 per cent in the previous week.
The Nasdaq biotech index was down 1.4 per cent, on track for its biggest one-day percentage decline since mid-December, led by a 3.9 per cent drop in Biogen and 3.2 per cent decline in Regeneron.
A 0.4 per cent decline in the bank subsector put pressure on the broader financials index, which was down 0.1 per cent.
Investors waited for the fourth-quarter earnings reports to gauge the impact of recent tax cuts. The earnings season kicks off later this week, starting with big banks.
Wells Fargo and Citigroup were down one per cent. Most big US lenders have estimated one-off charges to their fourth quarter earnings on account of tax cuts.
Defensive sectors such as utilities, real estate and telecommunications regained some ground lost in the previous week and were the S&P's biggest gainers on the day.
Caterpillar climbed 2.7 per cent to a record at US$165.55 after JP Morgan upgraded the stock saying the tax overhaul could help North America's construction business cycle extend in 2018.
Kohl's Corp was up five per cent. The department store operator posted far stronger same-store sales for the holidays than its bigger peers.
Nvidia was up 3.9 per cent after the graphics chip manufacturer announced partnership with Uber and Volkswagen as its artificial intelligence platforms expand into technology for self-driving cars.
GoPro shares were last down 15 per cent at US$6.41. Earlier in the day, it had lost about a third of its value and hit a record low at US$5.04 after saying it expected lower fourth-quarter revenue and that it would exit the drone business.
Advancing issues outnumbered declining ones on the NYSE by a 1.46-to-1 ratio; on Nasdaq, a 1.03-to-1 ratio favored advancers.
The S&P 500 posted 91 new 52-week highs and no new lows; the Nasdaq Composite recorded 112 new highs and 24 new lows.